Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
OTTAWA, Thursday, February 13, 2014
The Standing Senate Committee on Foreign Affairs and International Trade met this day, at 10:32 a.m., to study security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: The Standing Senate Committee on Foreign Affairs and International Trade is here in the context of its ongoing Asia-Pacific study on security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
We have before us Alex Neve, Secretary General of Amnesty International Canada, who is well known to all of us.
Thank you for coming. We are studying Asia-Pacific in a general way. We will be honing in to more of the Southeast Asia-Pacific area, including Burma, Singapore and Indonesia, so anything you may have as an opening statement would be helpful. Then there will be questions probably pointed to the countries that we are now narrowing to study in more detail.
Welcome to the committee, Mr. Neve. It has been some time.
Alex Neve, Secretary General, Amnesty International Canada: Thank you very much. It's certainly a pleasure to be in front of you and I welcome this opportunity to share some reflections from Amnesty International as part of your important study with respect obviously to an important world region. Clearly, grappling with Canada's role, challenges and opportunities when it comes to the Asia-Pacific is both timely and crucial.
I'm sure it will be no surprise to committee members that I intend to focus on the state of human rights protection in the Asia-Pacific region and the role that Canada can play in that regard, particularly within the context of what we see to be deepening and expanding economic ties and trading relationships for Canada with the region. We obviously want to see that help to prevent human rights violations but also, more widely, to promote human rights reform and improvements.
I would like to highlight to committee members that Amnesty International has a very strong record of human rights research and campaigning with respect to the Asia-Pacific region, which goes back now more than half a century, over 50 years.
In addition, we also have a strong and growing presence on the ground in the region, including now an international office in Hong Kong, and well-established Amnesty International sections along the lines of Amnesty International Canada in numerous countries, including South Korea, Japan, Taiwan, Malaysia, Thailand, Philippines, Australia, New Zealand, Mongolia and Nepal.
It obviously is a very diverse region and it would be folly to attempt anything close to an authoritative human rights roundup that encompassed the range of grave human rights challenges and exciting human rights opportunities that exist in countries that are as divergent as Papua New Guinea and Afghanistan, New Zealand and South Korea, or the enormous might of China and obviously the much smaller Maldives — incredible diversity.
I would, however, like to offer what I would suggest are some high-level reflections as to some but not all human rights trends that emerge in Amnesty International's research and reporting, and then the importance of Canada continuing to press bilaterally and multilaterally, both regionally and in global bodies such as the Commonwealth or the UN human rights system, for those concerns to be addressed.
To wrap up, I'll situate that in the context of the Canadian government's interest in formalizing closer trade and investment relations, multilaterally and bilaterally with the region. I'm not going to do so to offer any views with respect to Canadian investment policy or the country's trade priorities; that's not our expertise. I have nothing to offer on that front. However, I would very much like to highlight a key recommendation that does come from our expertise that we believe will help assure that Canada's approach to trade and investment in the Asia-Pacific region ends up being as good as it can be for human rights.
Let me begin with some high-level observations as to the prevailing human rights situation in the region. This is largely drawn from Amnesty International's annual report from 2013. It gives a quick snapshot of the situation in 2012 and is supplemented with some current areas of concern for us.
Let me begin with this, which is perhaps the most overarching area of concern that emerges with Amnesty International's work in almost all countries in the region, and that is that the simple act of publicly expressing one's opinion, whether on the streets or increasingly, of course, online continues to be met with harsh and even brutal state oppression in far too many countries. People are routinely harassed, attacked, jailed and killed for daring to challenge the authorities.
Here is a very brief flavour: In Vietnam, more than 20 peaceful dissidents, including bloggers and songwriters, were jailed on spurious charges relating to national security. In Indonesia, authorities locked up six people for blasphemy and 70 peaceful political activists remain behind bars. In Cambodia, security forces gunned down people peacefully protesting against forced eviction and poor working conditions.
In China, people protesting against mass forced evictions have risked detention and imprisonment or being sent to Re-education Through Labour camps. I'll come back to those in a moment. More than 100 people were detained to prevent protests ahead of the Chinese communist party leadership change in November 2012.
In Sri Lanka, journalists and others were arbitrarily arrested or abducted for criticizing the authorities. In India, activists working for the rights of indigenous communities were jailed on politically motivated charges. And, of course, in North Korea, Kim Jong-un continues to, I guess we may say, consolidate his leadership after assuming power in 2011. Political opponents continue to be banished to remote prison camps where they face severe malnutrition, hard labour, torture and, in many cases, death.
Armed conflict is also another area of concern for us in the region. It continues to blight the lives of tens of thousands of people throughout the region, with civilians suffering injury, death and displacement as a result of suicide attacks, indiscriminate bombings, aerial assaults or targeted killings in countries like as Afghanistan, Myanmar/ Burma, Pakistan and Thailand.
The ambitions of women and girls continue to be thwarted across the Asia-Pacific region as many states fail to even come close to adequately protecting and promoting their rights. In Afghanistan and Pakistan, many women and girls continue to be barred from public life and, in some cases, are subjected to execution-style killings by the Taliban.
Public outcry at the gang rape and subsequent death of a student in India in 2012, followed by other similar cases which have garnered public attention, have highlighted that country's persistent failure to curb shocking levels of violence against women and girls. The pervasiveness of violence against women in countries like Papua New Guinea, which doesn't often garner attention, has been shockingly illustrated by a spate of so-called sorcery killings against women and girls in that country.
It is not all despair. We have seen a real breath of opportunity and change recently in Myanmar. Hundreds of political prisoners have been freed, and we have welcomed every one of those releases. President Thein Sein promised to release all prisoners of conscience by the end of 2013, but now, six weeks into 2014, many remain behind bars. Additionally, Amnesty International has documented fresh arrests in Myanmar over the past six weeks under the country's draconian peaceful assembly and peaceful procession law, which continues to be used to target peaceful protesters who are critical of the government.
Also in Myanmar, intensifying violence and discrimination over the last two years against the Rohingya population in the country's Rakhine state have been sources of turmoil, displacement and repression. Amnesty International, for instance, just a few days ago issued an urgent action on behalf of 75 year-old Kyaw Hla Aung, a prominent Rohingya lawyer and a former staff member of a humanitarian NGO. He had previously spent 16 years in prison simply because of his peaceful advocacy and efforts to highlight the situation and needs of the Rohingya population. He was arrested again — and remains in jail — in July last year after intervening to prevent a protest in April last year from turning violent. We have issued our urgent action because there are serious concerns about his health.
In China, recent concerns include the arrest on January 15 and detention of a prominent Uighur scholar and founder of a notable website, Uighur Online. His whereabouts are currently unknown and there is grave concern he is at risk of torture.
We have expressed concern about the jailing of prominent Chinese legal scholar and anti-corruption activist Xu Zhiyong, sentenced in last January to a four-year prison term for "gathering a crowd to disturb order in a public place."
We have also spoken out about the case of Karma Tsewang, a prominent Tibetan monk who has not been allowed access to his family or lawyer since his arrest in early December. There are serious concerns about his health.
We have of course responded to the announcement by the Chinese government in December that the country's notorious re-education-through-labour-camp system would be abolished. We have welcomed that — for years that's something Amnesty International has called for — but we have noted with concern that Chinese authorities, at the same time, appear to be increasingly resorting to other forms of persecution through detention, such as so-called "black jails," enforced drug rehabilitation centres, and brainwashing centres where torture continues to be rampant.
The recent situation in Thailand has obviously been very tense in the course of the standoff between the government and opposition forces. Mass popular protests led to scores of people being killed and injured during clashes between pro- and anti-government forces over the past two months. We watch, hopeful that perhaps things are calming down, but there is a lot to be vigilant about on that front.
And then there is Sri Lanka. That country's very worrying human rights situation, past and present, was in the global spotlight at the time of November's Commonwealth summit in Sri Lanka. But just because the summit has come and gone, we want to be sure that the human rights concerns are not forgotten. Not only is there a pressing need to ensure full accountability for widespread and systematic abuses in the past by both sides in the conflict, an issue that will be sharply debated at next month's session of the UN Human Rights Council — and I will come back that — but there is also clear evidence that serious violations of human rights continue now; it's not just about the past. Those include extrajudicial executions in police custody, torture, threats, arrests and assaults of activists and journalists, and targeted attacks against religious minorities.
There is much more I could address. That is a very brief and selective tour of a number of countries in the region.
The key point I wanted to put in front of you is that, from Amnesty International's perspective, the Asia-Pacific region continues to be one that faces ongoing and very serious human rights challenges, even though there is a lot of optimism and excitement about economic growth and change in many countries in the region. My most crucial point, therefore, is to underscore how vital it is that Canada put those myriad concerns at the heart — not on the sidelines, not at the periphery, but at the heart — of its bilateral and multilateral dealings in the region.
Canada has admirably taken a very strong stand with respect to human rights violations in Sri Lanka recently, most obviously with Prime Minister Harper's decision not to attend the recent Commonwealth summit. Multilateral efforts to push for meaningful action to confront long-standing impunity in that country will be continuing at next month's session of the UN Human Rights Council. It's expected to be very contentious and very divisive, and we certainly expect and anticipate that Canada will continue to play an important role.
China is a complicated story. No country has settled into an effective and consistent strategy when it comes to addressing China's many very serious human rights problems. Governments are very much fixated on the economic potential of a close relationship with China and find it inconvenient to push human rights issues to the top of their bilateral dealings.
Going back close to 20 years, Canada has come to generally prefer an approach that does not involve public pressure or criticism of China's human rights record. Successive Canadian governments have often argued that Canada's influence with China is minimal, and that forceful criticism would be unproductive and might damage the relationship.
Amnesty International and other organizations have long called on Canada to develop a comprehensive human rights strategy for the Canada-China relationship. We don't have one. It's a strategy that should take account of all opportunities across all of government and across all of our dealings, and it should have a combination of both private and public forms of advocacy.
We have noted as well that Canada's influence with China is likely growing, with ever-greater Chinese interest in the Canadian natural resource sector. It is now particularly timely and necessary to develop that comprehensive approach.
Other countries in the region with serious human rights problems also tend to get an easy ride from Canada when trade prospects are on the table. Malaysia would be another example.
Canada is clearly interested in exploring commercial opportunities throughout the Asia-Pacific region and in deepening those opportunities by concluding bilateral and multilateral trade and investment agreements. The Trans-Pacific Partnership, which Canada joined in 2012 and which is currently pursuing free trade agreement negotiations, is a high-profile example. A foreign investment promotion and protection agreement signed with China in 2012 but not yet in force has also received considerable attention. Amnesty International takes no view on such agreements per se. Trade policy and investment strategies are not our remit, but we do consider it essential that Canadian trade and investment policy and agreements in the Asia-Pacific and around the world more deliberately pay very serious attention to human rights.
Trade and investment, and the business activities that are fostered and generated by trade and investment, if pursued responsibly and sustainably, absolutely can be beneficial to human rights protection, helping to improve livelihoods, open up opportunities for employment and for marginalized groups within societies, lead to greater access to education and skills development, and many other benefits.
Trade and investment and business activities can also, however — you knew there was going to be a "however" — be of great harm on the human rights front when pursued irresponsibly or recklessly. That is particularly so when there are no standards or weak standards in place to hold companies accountable for the human rights consequences of their activities.
That is the case in Canada. An effort to establish such standards and a low-level enforcement framework for holding Canadian companies accountable for their overseas human rights impact came close but not close enough to passing the House of Commons in 2010.
Business can be detrimental to human rights protection when the land and resource rights of indigenous peoples are disregarded by mining companies, when safe working conditions and just employment practices are not put in place by garment companies, when businesses benefit from laws that violate rights around union organizing, or when private or state security forces commit violence while "protecting" company operations. We obviously want to ensure that Canada's trade, investment and business practices and presence maximize the former — human rights promotion — and minimize, ideally avoid, the latter — human rights violations.
This is not just theoretical. It is very real. Amnesty International, other human rights groups and UN human rights experts have noted concerns associated with Canadian company operations in such countries as Papua New Guinea, the Philippines, Myanmar, China, Bangladesh, India and Mongolia.
With that in mind, let me wrap up with a simple but profoundly important, from our view, three-point recommendation as to a crucial policy step that Canada should take before moving on to finalize new agreements and arrangements in this region — in any region, in fact.
First, we would like to see clear enunciation that regard for internationally protected human rights is to be a pillar of Canada's strategies for pursuing increased and freer trade and investment in the Asia-Pacific and worldwide. We do not yet see that, for instance, in the government's recently released Global Markets Action Plan, which has no reference to human rights at all.
Second, in negotiating trade and investment agreements, ensure that there is explicit reference to the relevance and applicability of binding international human rights treaties, both in the agreements themselves and in domestic legislation implementing those agreements.
Third, establish in law a requirement that all trade and investment agreements will be subject to comprehensive, independent human rights impact assessments, both before coming into force and at regular intervals thereafter. Such assessments must be released publicly, and there must be an expectation and requirement that shortcomings identified through the assessments will be addressed and progress to alleviating those shortcomings will also be reported publicly.
Thank you very much. Those are the comments I wanted to share with you. I know I took a bit more time. I assumed since I have the whole table to myself here that Madam Chair would be a bit liberal with me, and she seems to have been. I appreciate having had that opportunity.
The Chair: I'm neither Liberal nor Conservative in this committee; I'm the neutral chair.
Mr. Neve: She was going to be permissive.
The Chair: Thank you for taking that time. You covered a great deal of territory, and no doubt you'll understand that I have a very long list of senators who want to ask you questions. I'm going to leave mine to the end.
Senator Johnson: Good morning, and thank you for your incredibly overwhelming flood of information.
I'm very curious to know how Amnesty International is perceived in these regions we are discussing in the Asia-Pacific. I'm very curious to know how you are perceived and how you feel you are impacting as an organization.
Mr. Neve: As I said in my opening, it's such a diverse region, and there isn't one answer to that question. It would differ considerably from country to country. I would say in general we are on the ascendant. Our growth and presence on the ground is increasing significantly, and that is an important part of continuing to strengthen the impact we have. We're not only an organization that's a strong international voice from elsewhere, but we are also a strong local and domestic human rights voice, whether that be other voices from the region pushing for change in a particular country or voices from within the country itself that are pushing for change.
We have obviously much closer relationships with some countries than others. There are many countries in the region that are very cooperative with Amnesty International and provide us wide open access. We have been enjoying an increasingly welcoming relationship with the Indian government recently, which two years ago gave permission for us to open a new national office in India. There is a lot of amazing work coming from there.
China, on the other hand, continues to this point in time to refuse to allow Amnesty International to even come into the country on the ground to carry out field research, which is a central piece of how we do our human rights research. It's not the only way, and that in no way means that we have not been doing work on China. I could easily, I'm sure, reach the ceiling with the reports and press releases and actions on China. That's something we're continuing to work on, really trying to build the confidence and the connections with Chinese authorities such that they would welcome rather than feel threatened by that kind of presence on the ground.
I could go on and on. The main point is that it differs.
Senator Johnson: You were talking about Myanmar/Burma. In Canada, in 2011, we raised concerns about their human rights record during the Universal Periodic Review of the United Nations Human Rights Council and made some recommendations. What would you say that Canada should do, as they are undertaking another one in 2015, next year? What should Canada say in this respect if a review were held?
Mr. Neve: Myanmar is a good example of a country where we need to carefully find a balance, and that is what we have been trying to do in our human rights work as well. No one would deny that the kind of change and improvement we've seen recently in the country is historic and unprecedented, and that needs to be welcomed, supported, bolstered and encouraged. Through interventions at the Universal Periodic Review and other kinds of opportunities open to Canada, it's always important to highlight and acknowledge that and encourage it to continue.
At the same time, we have been concerned, not so much with respect to Canada, but this is something we have noted with other countries, that there may be too much of a headlong rush to close the Myanmar file: "It was a terrible situation for decades, and Aung San Suu Kyi is now a national political figure, so all is good, let's move on and look elsewhere." We think that would be a big mistake. It's not just about encouraging the positive to continue. It actually is important to highlight and be critical of the ongoing violations. The situation for the Rohingya is an obvious example, but so too is the fact that that long-standing Myanmar story of political imprisonment and prisoners of conscience that did mark Aung San Suu Kyi's life herself for so long is not over at all. There are still people behind bars who should not be there. As I noted in my remarks, there are even some fresh arrests. We need to see from Canada an approach that will find that balance between encouragement and still keeping up the pressure.
Senator Downe: To follow up on Senator Johnson's question, to what do you attribute the improvement in Burma? There has been pressure for 27 years and nothing happened, but suddenly something changed. Did it come because of pressure from China or other countries, or was it change internally?
Mr. Neve: Well, of course we think that it was all Amnesty International campaigning. I think it was many things because for so long, so many forces were working for change in the country. From within, even in desperate and difficult situations, monks and the people were quietly working for change and keeping up that agitation to make it clear to the authorities that the people wanted change. That was crucial.
Absolutely, there was geopolitical pressure from China, in particular. I'm not privy to what the particular secrets of that might have been, but there was a sense that there was a bit of a change in tone in the way that China was dealing with the government. As well, there's the fact that external pressure never gave up, whether campaigning from civil society groups like Canada, Amnesty International, or concerned governments in UN human rights settings and elsewhere, and kept the country on the agenda and kept up the pressure to make sure that UN special rapporteurs were being appointed and that they were knocking constantly on the door. Secretary-Generals of the UN got drawn into that work at various points in time.
It's a very good reminder that with any country, big or small or powerful, the best human rights strategy is one that, as much as possible, can be active across all of those fronts — domestic, regional, international, civil society and governments — with some of it happening publicly, forcefully and critically and some of it happening more quietly behind closed doors. The lesson is probably that it's exactly that combination of forces that we need to make sure stays in place right now with respect to the situation in the country. As I was saying to Senator Johnson, we don't want to see governments closing the file and moving on now. It got us to a certain important point, and it can get us the distance we still need to go.
Senator Downe: That's why I worded the question the way I did. We have a long way to go in Burma.
In your presentation you mentioned three issues at the end. The third issue was about the impact of trade deals. Do you do any assessment after Canada signs a trade deal? For example, we had a trade deal with Jordan a number of years ago. One of the problems was garment workers who come in from Third World countries and work in horrendous conditions. Those products are shipped to Canada with no tariff. Do you do an after-deal assessment?
Mr. Neve: We don't have the capacity to do trade deal assessments. Through our advocacy, we urge that processes be put in place to ensure that they happen.
The one we have followed most closely, because it was the most significant breakthrough in terms of Canadian policy around this, was the free trade deal Colombia, which has been in force for a little over two years. In the end, largely as the result of a lot of campaigning and advocacy by civil society groups in both Colombia and Canada, a human rights impact process was added to it. That's the first time we have seen that with any trade deal Canada has concluded with any country. It's an annex to the agreement, and aspects of it are part of the implementing legislation.
As part of that, both governments are required to carry out a yearly assessment of the impact of the deal and to table that in their respective parliaments. We have had two such dates come and go in 2012 and 2013. In 2012, unfortunately in our view, the government tabled a report but chose not to assess human rights in that report. They said that they felt it was too early. We said back that a best practice would be to do their first assessment even before the trade deal comes into force. We don't agree that a few months into the trade deal is too early. Nonetheless, that's what happened in 2012.
In 2013 a minimal assessment was done, but it's very restrictive and certainly, in our view, hasn't taken the kind of perspective that's necessary to really get at some of the more troubling aspects — and we're not here to talk about trade in Colombia. For instance, increased trade is a great danger for indigenous peoples in Colombia, which we and others have documented. That hasn't been picked up on at all by the methodology being used.
That's an interesting beginning and is the kind of thing we'd like to see built upon in other trade deals. A lot of work still needs to be done as to how that gets taken up and implemented so that the promise of what a good human rights impact assessment could be is truly realized.
Senator Downe: Thank you.
[Translation]
Senator Fortin-Duplessis: First of all, Mr. Neve, welcome to the committee.
I am a French-speaking senator from Quebec. In preparation for your appearance today, I looked through Amnesty International Canada's website and something struck me. You focus your efforts on four priority countries: Canada, China, Mexico and Colombia. The French version of the Canadian site, however, does not mention priority countries but, rather, priority themes.
Could you please explain how Amnesty International Canada goes about choosing its priorities and why they differ? I am also curious as to whether Amnesty International Canada takes a coordinated approach to priority setting in the other countries it works in.
[English]
Mr. Neve: I could give you a whole workshop.
[Translation]
Senator Fortin-Duplessis: Very briefly, please, as I have another question. This is something that struck me, though, so I wanted to ask the question.
[English]
Mr. Neve: There are two separate Amnesty Internationals in Canada. We have the English branch, which I am the Secretary General of; and we have the francophone branch based in Montreal. We have separate boards of directors and we're separately incorporated, but we work closely together.
You're right that while there are many priority countries and priority themes that we work on in common, there are differences. That's reflective sometimes linguistically. Even though it may not be on their website, and I can't remember the ways in which they organize their website, but the francophone branch priority countries include pretty well the entire Maghreb — Tunisia, Algeria and Morocco. Obviously, part of the reason is the fact that they are French- and Arab-speaking countries.
Haiti is a very big priority for the francophone branch. My counterpart, Beatrice Vaugrante, Director General of the francophone branch of Amnesty International Canada, has been on an international mission to Haiti. That's a major area of concern.
Certainly, with regard to countries in francophone Africa, the francophone branch of Amnesty has a concerted campaign focusing on the issue of child-forced early marriage in Burkina Faso in West Africa for two reasons: first, it's a serious concern there; and second, the linguistic connection makes it a bit easier to do the work.
You're right in highlighting the four countries you saw on our website — China, Mexico, Colombia and Canada. I wouldn't want to leave an impression somehow that it doesn't mean we don't do work on a number of other countries and that there aren't even a number of other countries that get quite a bit of attention.
I've talked about Sri Lanka in my remarks today. Over the last couple of years, in particular with some very interesting international advocacy efforts and the fact that the Canadian government was playing a significant role in that, we significantly increased the work we were doing there. We did that because Sri Lanka, especially in English-speaking Canada, is a very important country in Canada with a large expatriate community here. Because of the role Canada was playing we felt we had some real openings and points of influence. That's an example of a country which, while it may not have the big billing on the website, will nonetheless be an area that gets focus.
Right now, due to crisis situations, we're giving a lot of attention to Syria, to the Central African Republic. I have done a lot of field work for Amnesty International in South Sudan, which too is having a real crisis these last couple of months. That's an area we're giving real attention to as well. There are the longer term crises and then the short-term ebbs and flows that come depending on what the world throws our way.
I could go on and on, which I'm sure you don't want to hear.
[Translation]
Senator Fortin-Duplessis: A little over a year ago, in September 2012, Amnesty International Canada applauded the Burmese government's decision to release hundreds of political prisoners. Canada, too, has acknowledged the progress Burma has made with respect to human rights, basic rights. And we realize that the country still has a long ways to go on the issue of human rights.
But do you think Canada was right to re-establish diplomatic ties with the country and open up an embassy there, even though things are not quite perfect as far as political freedom and human rights are concerned?
[English]
Mr. Neve: I get to duck this question because Amnesty International quite intentionally never takes a position, not just with respect to the Canadian government but any government, as to the decisions governments make about establishing, maintaining or breaking diplomatic relations with any other state. We view that as largely a political decision.
We certainly haven't criticized Canada's decision to establish relations with Burma and to open the embassy. What we have noted is, having done so, it's our expectation and I think it's what we're seeing, that that will be used by the Canadian government to amplify and increase our human rights efforts.
As far as we come to ever taking a position about maintaining or breaking diplomatic relations is to say to governments, "Whatever decision you make, whether it is to maintain, to establish or break diplomatic relations, please seriously factor human rights considerations into that equation." We recognize there will be a whole host of other political, economic and security considerations that lead governments to those decisions, but please make sure that human rights considerations are central.
I'm not privy to how all the factors were weighed when the government made that decision, but I believe the human rights considerations were certainly on that list.
Senator Ataullahjan: I had many questions about Burma but they have all been asked.
Let me throw something at you. One of our previous witnesses, David Welch, said that we need to talk about human security and not human rights. He says once we talk about human rights we get people's backs up. Would you agree with that statement?
Mr. Neve: Obviously, we're all about human rights, so we by no means want to see governments give up on the language of human rights. We think it's powerful and important language that comes from international treaties that governments themselves, including the very governments that we may be concerned about, have played a role in drafting, in adopting and having signed on to. We wouldn't go so far as to say that we shouldn't talk about human rights with governments who may be offended by it or feel threatened by that language.
At the same time, we recognize the value and importance of having a variety of different kinds of discourse with governments in advancing human rights issues. That may mean sometimes primarily with a particular government talking about it in terms of something like human security or with another government talking mainly about rule of law, democratic development or strengthening the justice system. There are a variety of ways in which we can have the discussion about human rights, but I don't think we ever want to do so out of a motivation to leave human rights behind. From our perspective the end goal always needs to be consistent advancement with a strong human rights agenda, recognizing that we need to have the conversation with some governments a bit differently at times.
Senator Ataullahjan: We have been speaking about countries that are not upholding human rights. Are there any countries in Asia-Pacific that are doing a good job at upholding human rights?
Mr. Neve: Yes. No country ever gets the gold seal of approval from Amnesty International. We're the activists, we're the advocates and you can never make us happy. As the senator has highlighted, Canada is one of our priority countries and we continue to have a lot to say about the many ways in which Canada needs to improve its record, including with respect to some very serious human rights issues. Obviously we're a country, more widely, with a pretty laudatory record.
The same would hold true in Asia-Pacific. The Asia-Pacific has countries as diverse as Australia and New Zealand, and there are entries on Australia and New Zealand in Amnesty International's most recent report. With Australia, while there is a lot we recognize as positive and strong, we've highlighted serious concerns with recent approaches to refugee protection. As well, there is an ongoing series of issues in the area of indigenous rights that are not dissimilar to some of the challenges we face in Canada.
South Korea would be a very good example. I was in Halifax over the weekend giving a speech that was reflective on where have we come in the last 30 years, and 30 years took me back to when I first joined Amnesty International. I talked to the audience about when I joined Amnesty. It was actually a university group in Halifax. The major prisoner case we were working on at that time was in South Korea. It was a time of military government. Anyone who was at all critical of that government was locked up; torture was rampant, et cetera.
Thirty years is not a short period of time but it's not a century either. What transformative change we see in a country like South Korea. Now we have a very active, dynamic and rapidly growing section of Amnesty International in South Korea.
Yes, there are countries in the region that are either in a very good place or I think in many respects are on a reform path, but they will always have Amnesty International looking over their shoulder.
Senator Oh: Thank you for doing very good work on human rights.
Can you tell us which country in the Pacific region that is not violating human rights?
Which country had a bad record before and now shows signs of improvement? Do you think economic growth will help to improve human rights and provide a better lifestyle for them?
Canada's trade volume is so small in the Pacific region compared to France, U.S., Germany, and Australia, which have benefitted so much more than we have in Canada. Are they doing something on human rights?
Mr. Neve: With respect to your first question, no. We would not say there is a country anywhere in the world that is not violating human rights. We criticize Scandinavian countries. There simply is no country that has yet figured out perfection when it comes to the human rights situation, and the Asia-Pacific region is no exception. Obviously there are countries where it is more serious than in others.
I would also highlight that we quite deliberately decline the many requests we receive from journalists and politicians and the general public to rank countries — here is the best country in the world, the second best, the third best, et cetera — simply because there is absolutely no way to do so. Many academics have put a lot of work in trying to come up with measures and formulas and qualitative and quantitative ways of trying to do so, but it's impossible. In our view, therefore, all efforts to do so ultimately end up starting to have a significant subjective or discretionary piece to it. You think, on the one hand, what if you have a country in which there is pretty serious torture. Let's say there is reason to believe that maybe as many as 50,000 people have been tortured in a particular country in one year. Then you have another country where there is no torture happening, but no girls are allowed to go to school. How do you compare them? I am sure everyone around the table would have differing views as to which is worse or whether you can even rank or compare them. That's the reason we have always declined not to go down that road. Maybe some academic will break it some way and we will actually have a reliable way of doing so.
Yes, I do think there are countries on the road to reform. In my remarks, I highlighted Myanmar/Burma, which I think is a very clear and obvious example. We've talked about the kinds of strategies that the government could and should be pursuing in that regard.
Yes, we do think Canada's economic relationship with a country can play a key role in that. Even though we ourselves don't have a lot of expertise around economic matters and don't wade into the debate about the best kind of trade deal and what kind of economic policies we should be pursuing, we do have a lot to say about the ways in which it's important to make those economic decisions so they avoid contributing to human rights violations, because we know that is a real risk. We see that in countries around the world. If an economic policy is put in place that simply in an unregulated manner welcomes a whole host of mining companies into a contested part of a country with indigenous peoples or in a conflict zone, we know from experience all over the world that that makes things worse. It almost inevitably deepens poverty, increases marginalization and fuels conflict. There are ways in which bad economic decisions, bad business practices, can be not just problematic but disastrous when it comes to human rights protection.
But the opposite is true if companies have solid human rights policies in place. If they come into a country, we ideally would say in the context I just sketched out in terms of what we would like to see in a human rights-focused approach to Canadian trade policy, which anchors recognition of human rights in trade documents — not over here in a completely different area — and they have processes in place to assess the human rights impact of those trade decisions and policies, we think it can end up being very good there.
In terms of comparing Canada's volume of trade with other countries, I don't have those numbers. I don't know how we stack up against other countries. I would generally say our assessment is that Canada is not alone in countries having this temptation, and this goes back to years and years of wanting to tiptoe carefully around human rights whenever trade or business or economic matters are on the table. That's not a uniquely Canadian shortcoming. That is something we see in governments around the world, in the global north and global south, and we are actively pressing all governments to improve.
Senator Oh: When I travel in the Asia-Pacific region, I see prosperity in many countries affecting the lives of many people. Do you think economic growth goes hand in hand with human rights?
Mr. Neve: Absolutely. It should.
In our view, prosperity is not the only human rights measure. The fact that we have a growing middle class and that people are able to buy a nicer home and maybe afford their first car is admirable, but that's by no means the only measure when it comes to human rights. We know from countries around the world that it's entirely possible to see prosperity growing while at the same time there are very authoritarian practices with respect to civil liberties and there continues to be little political opposition and critics of the government face the likelihood of imprisonment, et cetera. We wouldn't say that chasing after prosperity is what it's all about. It needs to be situated in a much wider human rights framework.
Senator Demers: I would like your opinion about change. In the Asia-Pacific, someone will give an opinion on the streets or online and will be put in jail or harassed or at times will even be killed.
We have in Canada and the States basketball equipment made by youth, very young, and older people that sells for $250. Most of the parents are going crazy because they can't afford it because there is a name of an athlete on it. I will not get into the naming of athletes because I don't want to get sued.
I play golf, and when you look at the golf equipment, it is made in China. We use those people. I call that control. We use those people to produce quality stuff, and it is quality, at very minimal pay, minimal price. When it comes back to North America, they make billions out of it.
Have you seen improvement in the way they use their people to create or make that equipment over the years? Are there better facilities for those young men and girls and certainly older women and older men who make that equipment?
Mr. Neve: The particular factory conditions, which I think is what you're highlighting, whether it be sports equipment or in the garment industry, which we see as well, is not an area in which Amnesty International itself does a lot of research, mainly because there are so many other organizations already doing so. What I will share with you is more reflective of what I understand coming out of their work of monitoring and researching and speaking out.
Most of them would probably say it's a very mixed record. Undoubtedly they would acknowledge that particular companies or countries have made real strides to put in place better codes of conduct and to make sure that there are meaningful processes in place to actually monitor those codes. It's useless to just have the words on paper around working conditions if they are not backed up with something. At the same time, as we think back over these last 18 months or so, we consistently incredibly tragic, heartbreaking reminders — such as in Bangladesh — of the fact that there is far, far to go. With the Bangladesh examples, it's not just the heartbreaking enormity of seeing how many people have lost their lives and beyond that how many families have been absolutely shattered. It has been stunning through the slow process of criminal investigations and court proceedings to see the ineptitude and corruption and lack of enforcement and lack of law that stands behind that.
A number of companies are rallying quickly because they know what they have at stake here. I think it still remains to be seen. There have been some good steps forward by a number of companies, some of whom have come together to try to adopt standards jointly. It remains to be seen as to whether that will deliver the goods.
It is a reminder, though, that when consumerism is involved, there often is a bit more power and potential to actually get something done, because these crises make their way out into the public domain and consumers make decisions as to whether they will or will not buy that product. I think we will continue to see both tragedies and also change coming out of those tragedies.
Senator Demers: Thank you for your honesty.
Senator Housakos: The Asia-Pacific region is a challenging part of the world for Canada — it has been and I assume it will continue to be. We've had some successes and failures in various areas of our pursuit of political and trade interests in the region.
Today, you bring up the interesting subject of human rights, one that is complicated and not easy to deal with. Of course, everyone is in favour of human rights, but "human rights" means very different things to different people. We can get into the discussion of what a human right is and what should and should not be classified under that category. Thank God Canadians have a broader perspective on that than some of the people do in the Asia-Pacific countries.
Has the Government of Canada balanced the defence of human rights with our political and commercial interests and pursuits in the region? In your testimony, you've pretty much given us a clear indication of where you stand on that, but more fundamentally, I'd like you to give us your point of view on what levers you think Canada has in the region in order to be more rigid in pursuit of human rights. It's always nice to stand up and say, "I'm for something," but if you don't have a stick to wave to back up your claims, it's somewhat difficult to pursue your political interests.
Lastly, from your organization's perspective, would you say that the Canadian public is aware enough of some of the issues of human rights in the Asia-Pacific region? What price is the Canadian public prepared to pay in pursuit of defending those interests in terms of jobs and trade revenue?
Mr. Neve: Big questions. First, I want to highlight that although you didn't ask it as a question, you did pose a rhetorical question, namely, what are human rights? I would just highlight that from Amnesty International's perspective — and I think this is how the Canadian government needs to operate as well — they are those rights that have been recognized and enshrined internationally.
This isn't about Canada going to the Asia-Pacific region and promoting the Canadian Charter of Rights and Freedoms. This is about Canada reminding Asia-Pacific counterparts that they, like we, are bound by the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and a long list of treaties. Not all Asian countries have signed on to all of those important treaties, but many have. Some of those treaties are almost close to universally ratified. Every Asia-Pacific nation has signed on to the Convention on the Rights of the Child, for instance. Only the U.S., Somalia and South Sudan have not.
With respect to the question of the right balance, I would come back to what I said before. I'm the advocate and the activist, so I'm clearly not satisfied and it will be very hard to satisfy me.
Sri Lanka would be a good example. We saw some strong and forceful human rights advocacy by Canada in recent years. Some might say, "We'll take it where we can get it." Some might say that that, too, was politically motivated, that it was largely about satisfying a particular constituency within the country, and it wasn't so hard to do because there are no massive amounts of trade between Canada and Sri Lanka that were at stake. I'm not going to go there. I'm just going to acknowledge that important human rights efforts have been made and are continuing.
We have been disappointed with respect to China. That's obviously the big one in the region when it comes to this issue of balancing trade and human rights. Our disappointment there goes back years and years.
I don't want to be mistaken in suggesting that somehow Amnesty International wants the government to have Minister Baird get up and issue an angry press release with a lot of finger wagging in public every time there is a human rights violation. We wouldn't endorse that kind of strategy either, but we continue to be disappointed, recognizing, as you said, that it's complicated; there is a balancing here.
China is a perfect example of a country where we really need a thoughtful, comprehensive strategy, and we don't have it. We never have, for years and years; we have had piecemeal efforts. Some years, Canada seems to be a little more brash than other years. Other years, you hardly ever hear anything from Canada, even though there have been serious human rights concerns in China.
None of that is happening in the context of a well-thought-out strategy that speaks, not just to the one, lonely, hard-working soul in the China division over at the Pearson building who has the human rights file, but one that actually gives guidance and instruction to people in Industry Canada, Natural Resources Canada, Citizenship and Immigration Canada and all sorts of other government departments in which there are constant dealings, back-and-forth and openings with Chinese officials at a whole host of levels where we could really be thinking about how to stream human rights through all of that. That would take me further down the road of not being disappointed. I think there's real potential there, and I would love to see that taken on as a serious effort.
Senator D. Smith: I apologize. I came in a few minutes late. When I was coming in, you were referring to Sri Lanka and Prime Minister Harper's decision not to attend a heads of state mission. I assumed you were supportive of that decision; is that correct?
Mr. Neve: It's never easy with Amnesty International. We never actually called for him to stay away because that's something we never do. We acknowledged that, having made the decision, it conveyed a strong human rights message and we wanted to see Canada's efforts to push and promote that human rights message continue in a whole host of other ways.
Senator D. Smith: By way of background, ironically I was asked in November by the Speaker if I would go with him to London, along with MP Joe Preston, Chair of the Canadian branch of the Commonwealth Parliamentary Association, to explain to Commonwealth headquarters and also the parliamentary group why Prime Minister Harper wasn't going, which was because of these human rights issues. I don't always agree with Prime Minister Harper on everything, but I did agree with him on that, and over we went.
You've already touched on this, but I want to see if you've got a feel as to how you decide when you visit and when you don't. There is a difference between governments and, say, parliamentary associations. In the case of parliamentary associations, presumably you'll be meeting with opposition members from those countries, hopefully. Some people are of the view that you just go regardless and preach the gospel of human rights, bona fide elections, anti-corruption policies and things like that. Do you think there are instances where it's so black and white that you just don't go at all, like North Korea, for example?
Mr. Neve: I'm not trying to duck the question. We actually don't take a position saying that any head of state should stay away from or should attend any summit in any particular country. We do say an ideal strategy — and I don't think we saw enough of this with respect to the Sri Lanka summit — is for countries to work together multilaterally in a very concerted way to come up with a shared and strategic approach that will be the most effective.
Accidentally, we actually got there with the Sri Lanka summit but not necessarily deliberately. We had, for instance, a prominent leader like Prime Minister Harper who made it very clear he was going to stay away and why. Prime Minister Cameron made a different decision and went but used it as an opportunity make some strong statements in-country about the human rights situation, which got a lot of both domestic and international attention.
In many respects, if Prime Minister Harper hadn't made his decision to stay away, there probably wouldn't have been as much pressure as there was on Prime Minister Cameron in the end, who had his own reasons for going, largely because the U.K. would probably be the last country to ever boycott a Commonwealth meeting. It put real pressure on him to be seen as very visible and outspoken about human rights while he was in the country; and both had benefit. We have a long way to go, but I don't think that necessarily was some sort of concerted U.K.-Canada scheming to come up with a one-two punch, such that Harper would stay away and Cameron would go.
Senator D. Smith: There wasn't scheming, but I point out that in the year before, the Commonwealth Parliamentary Association, which has representatives from oppositions, was held there. I was at it and the British members agreed to meet with some of the Tamil groups in Northern Sri Lanka; and I had been there before on stuff like this. The government did everything they could to veto it. They rearranged a trip to have some people meet with a couple of others who went, and most of us didn't go, and just preached the party line.
To get back to my basic question, if you think you can make a case for going to North Korea, then I guess you would probably go anywhere. What's your view on going to North Korea, preaching the gospel of human rights?
Mr. Neve: Amnesty International seeks to go anywhere and everywhere we can. Obviously, if we're only allowed to come with limitations and restrictions that we would consider untenable and that impair our impartiality, et cetera, then we won't go. If North Korea said, "Sure, Amnesty International, come, but for all those prison visits you want to do, you will have four police officers with you in every interview, and we're not going to let you go to that one detention camp you've been saying you want to go to, but we have a great one we want to take you to," then clearly we would say no.
The calculus is different for a government going because obviously it is not going as a human rights advocate. Similarly, if the conditions around the meeting feel like they are untenable and that it will end up being a laudatory window dressing opportunity for a government to seem to be an accepted and celebrated member of the international community against a backdrop of serious human rights violations, then that's probably something the Canadian government would not want to play a role in.
Senator D. Smith: At that conference I attended in Sri Lanka, a senior minister addressed one of the plenary sessions on how fine they were doing with human rights. When he sat down, he got booed. I could see the look of shock on his face, but certainly he got the message loud and clear; but I don't know if it changed anything.
Mr. Neve: You always live in hope.
Senator Demers: If you want to go to North Korea, go with that idiot Dennis Rodman.
The Chair: A little order here, please.
Mr. Neve, we have run over time, which explains that we are very concerned about the human rights record in these countries and how we can put it into our context.
I have many questions that I did not put. At some point, I will do so, with your permission, perhaps in a written form. Or perhaps we could have you back to concentrate on certain countries that we will be studying. When you put trade and human rights in an agreement, do you then narrow the focus, because the Twitter world goes into that as opposed to the broader issues of human rights? How do you balance where you put your emphasis on human rights with trade and all the other issues? You have put out Colombia. My concern is that so many other human rights issues that aren't trade-agreement focused are not being addressed. That has been a concern of some people. Perhaps you think they are being addressed. Give that some thought, because it is an issue about the security of countries developing with better human rights records and Canada's approach, which has to be economic, human rights and a full foreign policy.
You can reflect and then perhaps we could have you back before the committee or we could have that in written form on the countries of concentration where we might do something differently than have the debate. Is it human rights or trade? I've been at this table for many years, and we have had debates every so often about how to balance trade and human rights, in particular as they pertain to China. Perhaps we could pursue some of those issues.
As you can see, it is a concern for this committee, and we will focus it into the countries that we will concentrate on. Thank you for your input and your patience with all of our questions.
I apologize to our witnesses that we are running a little late. We've been trying to cover too much territory too quickly. Time constraints are always our enemy here.
Before us we have, as an individual, Pierre Lortie, Senior Business Advisor, Dentons Canada; and Ailish Campbell, Vice President, Policy, International and Fiscal Issues, Canadian Council of Chief Executives.
Before we proceed, Senator Smith, you wished to make a statement.
Senator D. Smith: I don't see any conflict here, but I think to be above board I should point out on the record that I have the title Chairman Emeritus of Dentons. I don't see a conflict, but I want to put that on the record. I'll be a good boy and listen very closely.
The Chair: It has been disclosed and noted.
I will turn to Mr. Lortie to make his opening remarks, followed by Ms. Campbell, and then we will go to questions. Hopefully we'll be able to get all senators in with a question before the adjournment.
[Translation]
Pierre Lortie, Senior Business Advisor, Dentons Canada, as an individual: I would like to thank the committee for the opportunity to present my perspective on issues related to Asia.
I view these issues through the lens of my experience at the helm of a Canadian corporation that did not think twice about going after Asian markets. My work allowed me to do business in most Asian countries and to run manufacturing and technology companies there.
I also had the honour of representing Canada on the APEC Business Advisory Council from 1999 to 2005 and to serve as a member of the Asia Pacific Foundation Taskforce on Canada's place within regional forums in the Asia-Pacific region. You heard from Don Campbell, who chaired the committee. I recently took part in a committee examining security concerns in Asia in cooperation with Australia. I will speak mainly from an economic perspective, but I would be glad to answer questions on other aspects during the question period afterwards.
[English]
The one issue I want to put on the table at the outset, because any discussion about Asia is always almost exclusively focused on Asia, is the point that today from an economic point of view there are three major areas. Since political power depends on economic force, it brings about very serious geopolitical questions for Canada, for individual Canadians, society and for the government.
Although it is tempting to suggest that Canada should redirect part of its resources, whether the Canadian government should redirect part of its expenditures and commitments from Europe or from the U.S. towards Asia, I think this would be a major blunder. The issue for Canada or for Canadian firms is not to redirect; it's to recognize that there are today three major theatres in which we have to be present with long-term commitments and the required resources. So it's not a question of substitution; it's a question of adding.
The second point is that Canada has, over the last two decades, pursued a trade strategy that was lacking. Since the FTA with the U.S. and NAFTA, we have not had consequential successes in trade negotiations for the last two decades. If you look from the year 2000, except for the agreement with the EFTA, all the other agreements are with countries that have no economic significance for Canada.
If you take the total amount of trade that we do with the countries where we have free trade agreements in effect today with the EFTA, it's about 1.16 per cent. If you take the EFTA out, it is 0.34 per cent of our total merchandise trade in 2013.
In my experience, when we talk to officials in the departments, they say, "We don't have the resources to pursue additional negotiations because we're running after Costa Rica," or God knows where. At the end of the day, we are squandering expert resources on agreements that don't have a lot of importance for us. They may be important from a development point of view, but they sure as hell are not a trade strategy.
That being said, I would commend the present government and say that Canadian efforts to conclude an agreement with the European Union has to be the first priority for this country. If we look at our trade, number one is clearly NAFTA or the U.S. Number two is Europe. Although, if you add up everything in Asia, you have a bit more than with Europe. The fact of the matter is that the Europe Union is a common market with common rules for investment and trade, whereas our important partners in Asia all pursue independent trade or investment strategies. Therefore, we have to knock them of one by one. It's a significant difference, and the priority given to the European Union was the right priority and one that I personally support very much.
What I'm trying to say is that Canada's trade strategy must, first and foremost, aim at maximizing the benefits that accrue from the trade agreements and minimizing the negative impact of the trade diversion stemming from agreements made by other countries.
Why does that have to be? The first point is that it's always easier to expand sales in a market you know than in one you don't. The second point is that if you do an agreement with a country where you already have a lot of trade, then when you eliminate the tariffs, you get the benefits right away. The third point is because we have a lot of trade there. If somebody has a better agreement than us, the costs to us are significant.
Korea is a case in point. It is open for business. In the last few years, it signed free trade agreements with Chile, Singapore, EFTA, ASEAN, India, the European Union, the U.S. and, more recently, with Australia. It has just concluded negotiations with Colombia and Turkey. It's in advanced negotiations with Japan, and with other countries. Basically, we're the only industrialized country that doesn't have access there, and it's important across the board for our economy, agriculture in particular.
The second point is that if we look at the tariffs, Korean tariffs are 13.3 per cent on average versus 4.3 per cent for Canada. So if you take that out, we're gaining immediately.
The third point is that because we failed to conclude an agreement with Korea in a timely manner, we have lost significant market share in that country. When Chile signed their FTA, in the year following the agreement, hog exports from Chile to Korea went up 22 per cent. If you look at our trade between 2011 and 2013, two years, which follows the EU and the U.S. agreements, we have a decline of $1.655 billion in merchandise trade with Korea. If you put that into perspective, that's basically the total trade we do with Australia, so it is significant. It is a huge cost, with little government expenses to get there. It needs the leadership to make it a priority.
Because of time constraints, the trade priorities for Asia, in my view, looking at those priorities plus some of the dimensions there, number one should be South Korea. Why? Because it's the one where FTA negotiations are the most advanced and one where diversion costs are beginning to bite significantly.
The second one is Japan. Japan is our second largest market in Asia. The new government under Prime Minister Abe is determined to revitalize the Japanese economy. It cannot do that without trade. They have signalled that they are open for trade agreements. They are engaged in a number of discussions not only within Asia but outside of Asia. Now, because Canada is saying, "We're going to do the TPP," and this and that, basically the Japanese don't know what is important to us anymore. As a result, they're slacking on us and putting their efforts somewhere else. By the way, even though there is tension between China and Korea and Japan, they're more advanced in their trade negotiations than they are with Canada. It tells you a lot.
The third one should be ASEAN. ASEAN is one of the largest markets for us in Asia, in fact the third largest. It is the centre of what is called the "noodle bowl" of agreements within Asia, and it is critical that we have a trade agreement with them.
If you put the priority on ASEAN, it raises the question about TPP. Although I concur with some of the arguments as to why Canada should be involved, the fact of the matter is that, for Canada, TPP is not that important. For Asian countries, TPP is important because it gives them access to the U.S. market. We have access to the U.S. market; therefore, there is no value for us to do it.
Basically, if we look at the 10 countries at the table for the TPP, the only one that really makes economic sense for us is Australia. Even if we had an agreement with Brunei, it would not change a lot for Canada.
Second, the U.S. approach on the TPP is not making a lot of friends in the area. They are asking for unlimited access in many areas but are not prepared to give the same. Cotton is a good example, with Vietnam. Plus, no one of sane mind would negotiate a trade agreement if you don't have fast-track authority, and the U.S. doesn't have fast-track authority.
The third point is that the TPP is viewed, in many areas in Asia, as a means for the U.S. to divert and compete with China. It's important to note that of the ASEAN countries, only four participate in TPP. The largest ones are not there. Indonesia is not there. Why is it that six of the ten, including the country that has been the leader in ASEAN, are not at the table? It is not for distraction or whatever. There are clear reasons for them not to do that, because the equilibrium in Asia is very important.
The fourth point is that a lot of people are saying, in essence, that their argument for participating has been proven by Japan saying maybe they want to be there. But to a large extent, if you increase the diversity of the countries around the table, it's hard to determine how that simplifies the process. It's already complex. To a large extent, we would be better to have free trade with Japan than trying to fool around with TPP, maybe have a trade agreement with them some day. We need to be clear-sighted about what we want to do.
The fourth priority should be China. I know this will spark a lot of debate in Canada, the old debate about what is realizable and absolute. It is a huge market and a market where we have to be clear-eyed and differentiate between "made in China" and "made by China." These are very different things. In terms of "made by China," there is not a lot that Canadian firms cannot compete with.
It is an important market. We should be there. I would suggest that as it embarks on negotiations with China, Canada should also embark on trade negotiations with Taiwan and do both at the same time. Today there are many countries signing agreements with Taiwan. Taiwan would be a large market for Canada. It's already a large market for Canada.
India is a reluctant trader. It has signed agreements across Asia. Most of those agreements are on goods only. Very few, if any, are WTO compliant. The negotiations have been very protracted. Basically, it is an important market. We need to engage with India, but we need to have our sights at the right place and recognize that it will be a tough run.
In conclusion, I would repeat that Canada would make a blunder of historic proportion if it proceeded to substitute North America or Europe for Asia. It's not a question of substitution; it's a question of recognizing that there is a new theatre and we need to invest and commit the resources that are required in all three. We also need to have a multi-faceted perspective and strategy vis-à-vis Asia.
I will conclude by saying that you need to put more resources today in the budgets. This may not be the most popular comment, but the fact of the matter is that we should look at what Australia did. I know Mr. Don Campbell expanded on that during his testimony.
If, between 2000 and 2013, Canada had had the same rate of growth in Asia as Australia — by the way, our markets are Northeast Asia, and the West Coast of Canada is closer to Japan than Australia, so distance is not the issue. If we had had the same rate of growth as Australia, our total merchandise exports would be 15 per cent higher than it is. That's almost twice our total merchandise exports to the European Union. I would suggest to you that is a very good investment for a country.
The Chair: Thank you.
Quickly, I will turn to the Canadian Council of Chief Executives, Ms. Campbell.
Ailish Campbell, Vice President, Policy, International and Fiscal Issues, Canadian Council of Chief Executives: Thank you, chair and committee members, for this invitation to appear in front of you.
[Translation]
The Canadian Council of Chief Executives, or CCCE, is a not-for-profit, non-partisan organization made up of 150 CEOs from Canada's leading companies. We are actively engaged in public policy research, consultation and advocacy. The CCCE is a source of thoughtful and informed comment from a business point of view on issues of national importance to the economic and social fabric of Canada.
[English]
Member companies collectively administer $4.5 trillion in assets and have annual revenues in excess of $850 billion. The council represents virtually every sector of the Canadian economy.
Our member firms are active around the world. As such, the Canadian government's actions to advance foreign market opportunities are critical.
I would like to break my remarks into two sections. First, I will highlight the commercial and economic issues and opportunities for Canada in the Asia-Pacific region; second, I will highlight the three main challenges faced by Canadian companies seeking to do business in the region and discuss possible ways of addressing these challenges.
First, then, to the opportunities. Let me frame this in simple, direct terms. GDP is rising in developing countries faster and at a greater scale than ever before in human history. Canadian firms, from agriculture to energy to financial services and IT, must be part of this growth story.
Asia will become home to more than 50 per cent of the global middle class by 2050, up from about 25 per cent today. This literally represents billions of customers for Canadian products.
Asia's recent surge is not a short-lived phenomenon. The changes that underpin Asia's transition, including large-scale urbanization, dramatic productivity gains and rapid advances in education, are relentless and fundamental.
Securing Asian markets for Canada's energy products is critical. We must diversify our customers, as Jim Prentice highlighted in his speech on Canada's foreign relations in Ottawa yesterday, and secure world prices for our energy products. There is significant work to do here at home as well to ensure we have the infrastructure to effectively serve and secure these markets.
Sectors with huge opportunities in Asia are as diverse as Canada's resilient economy. I have already mentioned energy. Other sectors that stand to grow and benefit include financial services; manufacturing, including aerospace; forestry products; agri-food; seafood; and education.
Now let me turn to the three main challenges faced by Canadian businesses seeking to land new customers in the region and ways of addressing these challenges.
First, as you have no doubt heard before, Canada is not sufficiently diversified in its exports. Only about 8 per cent of Canada's exports go to China, India and other fast-growing economies. We must conclude more modern, high-quality free trade agreements and investments with Asian nations. Japan and India are key targets in this regard. I would join with Mr. Lortie in emphasizing that Korea is an excellent agreement to conclude simply because it is within reach and would be pivotal as our first agreement with an Asian nation.
My CEO and President, Mr. John Manley, has issued a statement supporting the government in securing a free trade agreement with South Korea. I would respectfully note that one of our members, Ford, disagrees with this position.
Canada should also consider a strategic dialogue similar to Australia's with China. The lack of a more developed and ongoing China strategy is Canada's major gap in its economic portfolio, especially considering that China is Canada's second largest trading partner after the United States. Without such an agreement, we risk falling behind competitor nations.
The Trans-Pacific Partnership negotiations are also an opportunity to deepen our links in Asia. I would be happy to expand on TPP in the Q and A section, but the essential point is this: Much hinges on the quality of the TPP agreement and whether it will be a true market access opening agreement, whether that will come in the first round of the TPP, and whether it will deepen over time. The quality of that agreement is very much of interest to us.
Second, CCCE members have achieved great success in these challenging markets. I would be happy to share specific examples, and I'm sure many of them are already known to you, in the Q and A section if this is of interest. These markets are difficult to establish and grow in, however, not only because of distance but also complexity and different standards and regulations.
We must provide new — I join completely with the previous speaker, Mr. Lortie, and emphasize "new" — additional resources to the Canadian Trade Commissioner Service to Export Development Canada. I would argue that Canadian authorities that investigate and enforce trade rules — the CBSA, the CITT and others — in order to support Canadian companies in their efforts to break into these markets, need to establish, grow and ensure the enforcement of trade rules as we negotiate them.
Third, there remains a lack of awareness in Canada of Asian markets overall and, I would argue, of specific nations for expanding business opportunities. The business community must do its part to raise awareness of the importance of Asia. Commercial relationships develop not simply through the exchange of goods and services but through dynamic interactions ranging from investments in foreign subsidiaries and joint ventures, licensing intellectual property, supply chain access across multiple jurisdictions, and the work of teams in both Canada and Asia working together to provide services, such as accounting. I would note also that firms must tailor their products to local tastes and demands.
For our part to raise awareness in the Canadian business community and amongst policy makers of the opportunities in Asia more broadly, the Canadian Council of Chief Executives launched an initiative entitled Canada in the Pacific Century to identify and promote key policy solutions to enhance Canada's ability to succeed in a transforming global economy. The results of this initiative are available online at our website, and I have tabled here the final report.
[Translation]
It is also available on our website in French.
[English]
The CCCE is the secretariat for the newly created Canada-India Chief Executive Forum along with our critical partner, the Confederation of Indian Industry. We are pleased to provide support to our CEO Forum co-chairs, Tom Jenkins of OpenText and Hari Bhartia of Jubilant Life Sciences, and the CEOs who form the committee and working groups. Our next CEO Forum meeting will be on February 25 in Delhi, India.
I trust my remarks here today underscore that the private sector is taking action and not waiting for government but leading it where necessary, working in cooperation with the government where possible and working with key players, such as Export Development Canada, the Trade Commissioner Service and the negotiators at the Department of Foreign Affairs, Trade and Development as well as provincial and territorial partners.
While firmly keeping our paramount economic relationship with the United States robust and dynamic, and with traditional partners in the region, Canada also must expand its activities in growing markets, chiefly China, India, Indonesia and Malaysia. Mr. Lortie noted the importance of CETA and the EU — it is 500 million people, and China alone is 1 billion people. We have to look at where the middle class customers for Canadian products are and prioritize those markets. Asian markets provide the scale of customer demand required for Canadian firms to create job, grow and create global presence.
Member firms of the Canadian Council of Chief Executives wish to see more businesses using Canada as the staging ground for their global operations. In that regard, investment and economic agreements with Asia are critical.
Thank you.
The Chair: Thank you for covering a lot of area rather quickly.
[Translation]
Senator Dawson: First of all, to our two witnesses, I agree that the idea should be to add resources, not redirect them. The Canadian government needs to increase its investments in various countries — not to mean we should be shifting our priority from Europe to the Asia-Pacific region.
Mr. Lortie, I am of the same mind as you regarding the agreements signed with numerous countries, the free trade agreements, and the economic benefits. My friend from Prince Edward Island could tell you all about the impact of an agreement with Panama on Prince Edward Island's economy, but I will let him speak to that.
Nevertheless, we have a problem of the practical variety. We have to set priorities. Recently, we did China, Ms. Campbell, and India. Now, we are looking at the Asia-Pacific region and, as a committee, we have to choose our priorities. As a CEO, Mr. Lortie, you would occasionally have to prioritize certain sales targets, but, we, as a committee, have to identify those countries where we should place a little more focus.
Besides China and India, which the committee recently studied, before I joined, I would like to hear what you would recommend as far as priorities go, be it Indonesia, Malaysia or Singapore. If it were up to you, what would your priorities be?
Mr. Lortie: When you say "we did," are you referring to the Senate committee?
Senator Dawson: Yes.
Mr. Lortie: Because, from Canada's standpoint, practically nothing has been done.
Basically, the top priority is to sign agreements to ensure that the efforts and resources being mobilized lead to economic benefits. Considerable efforts have been made in the past few years to raise our profile in Asia. And all of that needs to lead to trade agreements. The important areas for Canada are northeast Asia, Korea, Japan and China. Those three countries are currently engaged in free trade agreement negotiations. And if they are successful, the region will be more significant in terms of GDP than the United States.
We know the players in the markets where Canada is already present. Those markets are readily accessible to us — at least on the western coast. In short, that is where the scale of our trade is clear.
The other important element is ASEAN, which represents 10 countries. They include Indonesia, which has been instrumental in positioning ASEAN in Asia. A bilateral agreement with ASEAN would give us access to its various member states. Indonesia is, without a doubt, an extremely important country. Unlike India, with whom the process is long and complicated, ASEAN has agreements with just about everybody.
ASEAN represents our third largest market in Asia. Our biggest market there is China, then Japan, followed by ASEAN and then Korea. An agreement with ASEAN would have other complications. But, fundamentally, it is the most important market for us. ASEAN is also the organization with the most political influence throughout Asia — at least, it was vital in setting up the institutional architecture that governs Asia.
Certainly, as far as organizations Canada should align itself with are concerned, ASEAN is of tremendous importance. India is important for economic and security reasons. If a conflict arises, it is more likely to occur off the Indian Ocean than the China Sea. So we cannot disregard India. From a purely economic standpoint, it ranks fourth.
Senator Dawson: I agree with you that little has been done in the past few years. So, as part of a team that has decided that Team Canada needs to go after the ASEAN countries, you are being asked to pinpoint two or three targets. What are they?
Mr. Lortie: I would tell you that, in 2013, Japan's Prime Minister visited each of the ASEAN capital cities. ASEAN is important to Japan, and the country is making considerable efforts in that regard. Obviously, some ASEAN countries are more important than others, and Indonesia is one. Singapore usually plays a significant role or wields influence, and more and more, that is true of Thailand, Malaysia and Vietnam. Brunei is last.
Despite having other problems as well, the Prime Minister of Japan sees Asia as important, sees trade as important, and that is why he visited all the capital cities in 2013. It is not a matter of choice.
[English]
Senator Downe: Mr. Lortie, I want to follow up on your presentation. I share many of your concerns and have spoken about them on many occasions in the Senate. A couple of years ago, Canada was in the process of negotiating 67 trade deals with 67 different countries. Those are ongoing. We can only imagine the resources they are consuming within government rather than focusing on our priority targets.
After we sign these targets with minor countries, our trade deficit, in many cases if not all cases, increases dramatically. Two years after we signed the deal with Peru, our deficit went from $2.5 billion to $3.9 billion, and since 2006 our goods and services have declined by 7.5 per cent. Most of what we're exporting now is commodities.
We are very concerned about the opportunities and the middle class in Asia, but what about the middle class in Canada? Where are they going to be working?
Mr. Lortie: That's an important issue. The most important partners we have are developed economies — the South Koreans, the Japanese and so on. Quite frankly, the benefits of trade are normally larger when you're trading with countries that are more or less at the equivalent level of development as opposed to different levels. To a large extent, the agreements we have made, except maybe Peru, were really foreign aid under the guise of trade as opposed to a true trade strategy, and I think we should look at it that way.
At the end of the day, if we went through the major countries in Asia where we have large trade relations, in essence, we would gain a lot. When we look at all the industries, Canadian industries versus the Chinese industries, surprisingly, for a lot of people, Canadian industry is more competitive than the Chinese industries in those key sectors. It is not true that we cannot win.
There is a lot of reshoring happening on the manufacturing side, and it will be very difficult for Canada to do it unless we are part of the supply chains. We cannot be in the supply chains if we don't have presence there. If you look at the investment protection agreements we have in Asia, there are gaping holes all over the place. We need a strategy that is more comprehensive and that really focuses on those areas where we already have a large presence and can expand. If we don't do it, we're going to lose huge shares of market because the EU and the U.S. are busy doing them.
Senator Downe: Your view is that these minor agreements are really foreign aid, so set those aside. They are done for purposes other than prosperity for Canada. Where we have to focus our efforts on a narrow path is on these countries where we not only have a presence but we have similar established economies. Is that correct?
Mr. Lortie: Yes. If you look at merchandise trade, 95.8 per cent of our trade, of our merchandise export in 2013, were to our 10 largest markets; we have free trade agreements with only two of them. You don't need to be a genius to know where you need to go to score.
Ms. Campbell: On the trade deficit point, there is a critical structural issue. Asia is critical to addressing our trade deficit because we have recently seen the world energy market turned on its head because the U.S. for the first time since 1949 is actually going to export oil. It has discovered new forms of energy, and we are locked into a relationship with one customer. If you want to see the delta for prices diminish, if you want to secure new relationships and see that trade deficit disappear, the number one factor is achieving world prices for Canada's energy exports. We will only do that with new customers, and where are those customers? They are in Asia.
Senator Downe: Our trade deficit has gone up since 2006 from $37.8 billion to $143 billion. It's much more than oil.
Ms. Campbell: Certainly, but world energy prices, and I would be happy to compose the number for you, are a huge part of that.
I encourage you to look far beyond our trade deficit, because we are not measuring services or foreign affiliate well in Canada. Actually, no jurisdiction in the world is doing this. This is where we have to up the game of our statistics agency and those around the world. That's going to be captured not in merchandise trade issues but in repatriated profits, so we have to look at the whole balance of payment account, including the capital account and the current account.
Mr. Lortie: If you look at the merchandise trade of Canada, we went from 4.5 per cent of global merchandise trade to 2.3 within the last few years. Basically, we're not gaining in the markets. Korea is a good example. We need to be on a competitive basis with our major competitors, and that means that the Canadian government has to put the framework in place, and that framework is called a free trade area. There are no two ways around it.
[Translation]
Senator Fortin-Duplessis: I want to welcome you to the committee and commend you on your presentations. I have just one question and it is for Ms. Campbell.
No doubt, intellectual property is a major issue when it comes to trade and the production of goods in Asia. In your CV, I saw that you had dealt with intellectual property issues. Do you believe IP is a recurring problem for our companies doing business in Asia?
[English]
Ms. Campbell: The short answer is yes. This is always a risk. Intellectual property risk, first of all, needs to be recognized inside the firm, so intellectual property has to be recognized by the CEO and the CFO as part of the value proposition of a company. It has to be properly protected and structures put in place, proper patents and proper copyrights, in multiple jurisdictions. First and foremost, it has to be recognized by the firm.
I would argue that the problem may sometimes rest with small- and medium-size enterprises, or even large enterprises, that don't realize what they have is a patentable IP-related product that they need to guard more effectively and have a more robust IP strategy for their firm. Then they go abroad, and there I think lessons are clear. They need to ensure that they are working with the proper authorities in those jurisdictions. They need to find others in their class and learn some of the lessons about IP protection. Sometimes it may be a forced relationship with a joint venture partner in that country because it is better to have some share of a sale than see your intellectual property taken. Then you're into enforcement and into legal proceedings as opposed to building customer relationships. Firms have to look at business strategies to address those issues.
We also need to look around the world in terms of best practices. I've heard people discuss, for example, having Export Development Canada issue a form of IP insurance to help exporters not only recognize the value of their IP but also provide a certain amount of insurance in case of expropriation of IP. It's an area we need to explore further.
[Translation]
Senator Fortin-Duplessis: What do you recommend in countries where judges or officials can be bribed and a Canadian company is not able to assert its rights?
[English]
Ms. Campbell: In this particular instance, we've talked about where we think there are more like-to-like regimes. Japan is an excellent example where we need to deepen relationships. They're an advanced economy. We are not very well penetrated into that market. We could do more work there immediately.
For those other questions you raised, I would say there is where a government-to-government, leader-to-leader relationship is very important to underscore Canada's interests in those areas.
[Translation]
Mr. Lortie: In my experience, if a challenge came up after the contracts had been signed, the issue was dealt with outside the country by the court of justice in London, for example.
Senator Fortin-Duplessis: Even for countries in the Asia-Pacific region?
Mr. Lortie: Including China.
Senator Fortin-Duplessis: Thank you very much.
[English]
Senator Downe: Back to this trade deficit, I'll ask Ms. Campbell about the role of the Canadian business community. It seems these other countries are prepared much better than Canada when we sign these free trade deals. Is there a gap? Is there a role for government or is there a role for business or a combination of the two between the signing of the deal and the preparation to take advantage of any opportunities in these countries?
I'm thinking of Peru. You go through all the countries I can list for you where we've signed the deals and the trade deficit has gone up dramatically. What's missing in the preparation?
Ms. Campbell: I think you're asking the right question. I wouldn't pretend to have the whole answer, but here is a shot at it. It's simply this. We have concluded an agreement with our largest trading partner in NAFTA and we are essentially cultural cousins with the United States. Our businesses didn't need a lot of tutelage. We have not, I don't think, had the experience either in government or in business of concluding an agreement of that magnitude until last year.
I think we're in new terrain. I don't know that there are great Canadian patterns to copy. I think we need to look abroad to Germany; we need to look at Australia; we need to look at small nations that are punching way above their weight, like the Scandinavian countries. If you will allow me, that IP isn't protected. We need to create a made-in-Canada version of those. That's going to take the business community stepping up; that's going to take supply chains and mentoring of large firms to small firms. That's going to take strategies. For example, I want to see what the CETA implementation strategy is, not only from the Department of Foreign Affairs, International Trade and Development, DFATD. I like to just say "International."
We need to see the international department strategy here. The CCCE would like to see EDC strategy, BDC strategy, and working with the provinces.
The good news is that we have successful firms, especially for a country of 30 million with the slight disadvantage of being spread out, so we do not have some of the natural clustering of business mentorships that's easier in Scandinavian countries, for example. But I think Quebec with CG100 and other business mentoring institutions are showing how business-to-business relationships can amplify those opportunities. Absolutely, those government agencies I named should have their own strategies to help amplify this, I would say for small- and medium-sized firms.
Senator Downe: Is your association in any discussion with the government now on addressing this problem?
Ms. Campbell: I wouldn't say directly, but I would say just by the nature of having business-to-business relationships with European firms and equivalent organizations in the EU; so I think that's the next stage. We're focused on seeing the full text of the agreement, first, which I understand will be forthcoming, and then the ratification process. We have to put all of our emphasis on that. I'm hoping for swift ratification both here and at the European Parliament of the vast majority of the deal.
You're absolutely right; we should be working on that issue.
The Chair: Thank you to both Mr. Lortie and Ms. Campbell.
I didn't put a question, but one of the areas that I follow closely is Europe. Their strategy isn't to identify the key markets and do trade with them. They want an imprint everywhere because one doesn't know what the politics will be like or the opportunities.
One of the knocks on us was that we weren't in Korea early enough. Australia was there. Had we been there, we might have been able to conclude something more quickly.
One strategy is to have some presence, identify what kind of presence around the world, because we're so dramatically changing. Another is to zero in and find your markets. Another is to balance larger companies, energy companies, et cetera, with small- and medium-sized companies.
My own province, Saskatchewan, had incredible success because of niche markets, if you can call them that. Peru is one of them, which I have argued in a gentle way with Senator Downe about the opportunities for certain businesses in my province, which may not be reflective of the deficit picture, et cetera.
There is one strategy of identifying how you conduct your trade, and the other is what areas you focus on immediately.
Perhaps we'll have an opportunity to continue this dialogue. You can see that there's a great interest. Please follow our work and perhaps we will have you back to critique us as we hone down on a number of countries. You'll see if we're addressing the right issues.
Thank you very much. I apologize; we're stressed all the time in these committees to finish and move on to our other committees. Thank you for coming today.
(The committee adjourned.) |
