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Council of Canadians challenges “free trade” logic at Canada-Jordan FTA hearing in Ottawa

Council of Canadians Executive Director Garry Neil addressed the parliamentary international trade committee yesterday on the Canada-Jordan Free Trade Agreement. The “economically meaningless” deal, as Neil put it in his presentation (Canada exported $66 million in goods to Jordan in 2010), is making its way through the House of Commons ratification process.

Though the FTA is not “comprehensive” in the same way that CETA is (the Jordan deal covers trade in goods only), a complementary Foreign Investment Promotion and Protection Agreement (FIPA), or bilateral investment treaty, in place since 2010 makes sure Canadian investors in Jordan have far more rights to fair treatment than anyone else in the country, including its government. Parallel environment and labour side agreements are not expected to improve that imbalance.

As previous presenters to the trade committee had pointed out, the impacts of free trade (with the U.S.) have done nothing to improve the degrading working conditions of people in Jordan’s sweatshop manufacturing zones. That’s not what free trade deals do, which is a big part of why the Council of Canadians continues to oppose these agreements, which the Harper government has made a cornerstone of its economic policy.

“The Council supports more balanced global trade, freer movement of people and more robust exchanges between world cultures,” said Neil yesterday at committee. “But, we reject the trade and investment agreements that have been negotiated by Canada both bilaterally and multilaterally because they create arbitrary limits on government policies designed to create jobs, protect public health, lower greenhouse gas emissions or otherwise protect the environment.”

INVESTOR-STATE DISPUTE SETTLEMENT

Neil said “it’s pretty hard to support these agreements when we see Ontario’s Green Energy Act under threat from the WTO and when we’ve seen Canada pay out millions of dollars to corporations under the investor-state dispute settlement provisions of the investment treaties arising from challenges to legitimate Canadian public policy decisions.”

He gave the early NAFTA example of the S.D. Meyers case, in which the U.S. company successfully challenged a Canadian ban on the export of toxic PCB wastes. Canada cited the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal but the tribunal rejected Canada’s arguments and awarded the S.D. Meyers US $5 million.

“We would note that just last month the United Nations Conference on Trade and Development reported that Canada has attracted the sixth largest number of such cases,” explained Neil. “They also pointed out that what is happening now is that governments are wary of regulating in certain fields out of fear of lawsuits. The UNCTAD report said that ‘the (Investor State Dispute Settlement) regime reaches far beyond its original intention,’ and it urges ‘policymakers around the globe … to bring the system back to its original role of promoting good governance and fostering the rule of law.'”

LABOUR RIGHTS VIOLATIONS IN JORDAN

When Jeff Vogt of the International Trade Union Confederation presented to trade committee last month, he asked “whether the Kingdom of Jordan currently complies with the commitments it must undertake under the [parallel Canada-Jordan] bilateral agreement on labour cooperation.” The simple answer, he said, was no.

Article 1 of the agreement — requiring that each party (Canada and Jordan) must provide core protections for workers, such as core ILO labour rights, and including “acceptable minimum employment standards; compensation, such as minimum wages and overtime pay; the prevention of occupational illnesses and injuries; and non-discrimination in respect of working conditions for migrant workers” — was already being breached by Jordan’s labour laws.

Vogt explains how Jordan’s labour code requires a minimum of 50 workers to form a union, and it allows a tripartite committee to decide in which industries workers may form a union and to limit the number of unions in that industry to one. The monarchy in Jordan bans foreign workers from forming labour unions of their own, or to participate in existing unions in a leadership role. All of this runs up against ILO principles and international standards.

Much of Jordan’s manufacturing happens in “Qualified Industrial Zones” established with help from the U.S. in 1998. There are no 13 QIZs with over 50 factories and several satellite locations around the country, according to the Jordan Economic and Commerce Bureau in Washington, D.C. The bureau hails the FTA as a model for further country bilaterals in the Arab region but the labour rights chapter must be seen as a failure.

The Institute for Global Labour and Human Rights regularly documents problems in specific factories in Jordan, drawing attention to the failure of the 2000 U.S.-Jordan FTA to improve labour rights. Recent examples include the International Business Garment Manufacturing plant (IBGM), a Chinese-owned company that makes products for Foot Locker and other stores. IBGM is on Jordan’s “Gold List”, identifying it as one of the best factories in the country, and yet the sweatshop and dormitory conditions are atrocious, and the goods receive duty free access to the U.S. market.

HUMAN RIGHTS IMPACT ASSESSMENT

Because the precarious human right situation in Jordan, the Council of Canadians urged the trade committee to perform a Human Rights Impact Assessment prior to ratification and then on an annual basis thereafter. The Colombia FTA would not have passed without the inclusion of an HRIA, though unfortunately it was not done before finalizing the deal as over 60 Canadian organizations had requested. (We’re not sure whether Canada or Colombia will produce their first reports by this May as required by law in the FTA.)

“While Jordan seems to be in transition from a monarchy to a democracy, there are serious human rights concerns,” said Neil. “According to the Freedom in the World Report 2011, Jordan had a ‘Not Free’ status. Concerns include the limitations on the ability of citizens to change the government, inequality of women and minorities, limitations on free speech and free media, restricted labour rights and cases of arbitrary detention, torture and loss of life. The Assessment should cover labour conditions and workers’ rights.”

Neil described a recent UN Human Rights Council report urging all countries to perform HRIAs as a matter of course before entering into free trade and investment agreements with other countries. The reason is that FTAs, FIPAs or other investment treaties “may preclude a country adopting certain measures, including lowering tariffs or strengthening intellectual property rights in a way that deprives people of their rights,” Neil explained. “Also, countries should not be blocked from controlling private actors, ‘as a result of an excessively high level of protection of foreign investors established on their territory or because of a broad understanding of the prohibition of imposing performance requirements on such investors.'”

He added that “of particular concern” with respect to Jordan is the recently implemented UN human right to clean water and sanitation.

“Jordan is one of the ten most water scarce countries in the world. It is dependent on the Jordan River and Yarmouk River for its surface water and most of these are taken by Israel and Syria. Jordan’s groundwater resources are being over-exploited. What the FTA and FIPA will do is to essentially lock in existing corporate expectations, which include water intake for mining and manufacturing.”

CULTURE AND ENVIRONMENT

On cultural protections, Neil said he was pleased to see a cultural exemption in the Jordan FTA, but that bilateral and multilateral free trade and investment agreements “should begin to provide that obligations parties have to each other under Multilateral Cultural Agreements should prevail over those in the free trade and investment treaties” in the event of a dispute. The same kind of language exists in trade deals related to multilateral environmental agreements.

On the environmental side agreement, the Council of Canadians agreed with the Canadian Environmental Law Association that the current definition of exceptions for environmental measures is too narrow and should be expanded. The Canada-Jordan deal “should not be limited only to those laws whose primary purpose is environmental protection, but should include other laws that also relate in part to environmental protection. We also think the exclusion of laws relating to public health and worker health and safety, from that side agreement, is not reasonable.”

For the audio file of Neil’s presentation, which includes another from Mark Rowlinson of the United Steelworkers, as well as the Q+A with trade committee members, see the parliamentary trade committee page here.