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The Need for Partnerships: Trade and Human Rights in Canada’s Foreign Policy

Remarks for the Hon. David Kilgour, P.C., M.P. at the Think tank on Investing in Developing Countries: Meeting the Human Rights Challenge

Lester B. Pearson Building

Ottawa, ON, 11 June 2003

Je tiens à féliciter Droits et Démocratie d’avoir organisé cette session d’une journée. Pour l’ensemble du gouvernement et pour les deux chambres du Parlement, cette organisation – tout comme la plupart d’entre vous – agit comme la « conscience » des décideurs. Nous avons le devoir moral de garder les droits de la personne et la dignité humaine au centre du processus décisionnel du gouvernement, et votre travail nous est à cet égard d’un précieux secours.

Canadians have been active in helping construct both an international trade/investment system and international law to protect and promote human rights. These are pillars of our foreign policy. The progress that we’ve made in creating a system of international law that recognises the inherent value of human rights has been dwarfed, however, in the last 20 years by the nature of the international trading practices we’ve helped build; ones where, as Bachand and Rousseau write, "precedence is given to the interests of investors over those of citizens.” And so the challenge is how can we ensure that the two spheres of international policy and law evolve in a balanced and mutually supportive manner?

In offering some thoughts this morning, my approach is two-fold: first, I’d like to outline how Canada is trying to improve upon the trading/investment system we’ve helped construct, such that it is flexible and fair enough to respond to the social and economic needs of developing countries -- in other words, better linking investment to sustainable development and human rights considerations. Second, I’d like to discuss how we’re trying to encourage Canadian companies to be good corporate citizens.

The International Trading Regime

Nowhere has the process of creating a tight, international legal system, with enforceable and binding obligations, been more marked than in the area of international trade and economic law.

Today the WTO agreement is regularly given to judicial interpretation. Indeed, from 1995 to mid-December 2002, the Dispute Settlement and Appellate Bodies considered 275 cases on 180 distinct matters. These decisions are for the most part binding and have a good record of compliance.

The effective enforcement mechanism of the WTO is starkly contrasted with the non-existent enforcement of the United Nations Commission on Human Rights, or the voluntary compliance with International Court of Justice decisions. It is clear that the two legal regimes have developed divergently, with trade law reaching a level of effective implementation and human rights law depending on the good will of governments. Elemental justice demands that human rights law develop equal enforcement powers and that the values of liberty and of liberal trade be mutually enforced so as to encourage sustainable and fair development.

Il ne fait pourtant aucun doute que dans le contexte commercial international actuel, les pays développés constituent un important obstacle à l’essor des pays en développement de notre hémisphère et d’ailleurs. Le président de Droits et Démocratie, Dr. Jean-Louis Roy, est très clair sur ce point dans son dernier ouvrage Technologies et géopolitique à l’aube du XXIe siècle, dans lequel il dit notamment ceci :

« Le commerce international n’est pas en lui-même un frein à la satisfaction des besoins et des intérêts des pauvres du monde, mais les règles qui le structurent favorisent les pays riches. » [i]

L’exemple le plus patent de cela est le subventionnement de l’agriculture dans les pays industrialisés : en 2000, les pays de l’OCDE ont consacré à ce seul chapitre l’incroyable somme de 300 milliards $US, ce qui équivaut au PIB total de l’Afrique subsaharienne.

Free Market Access

Canadian policy has recognized that the rules desperately need changing. One step involves providing market access to goods from developing countries. As of January this year, Canada has opened its markets to the world's least developed countries (LDCs). This initiative will help to foster economic growth primarily throughout Africa, for example, by eliminating tariffs and quotas on almost all products. For the LDCs, the Canadian approach constitutes one of the most tangible gains they have realized to date; gains that include a 74% increase in imports in the first quarter of 2003; of which there as been a 134% increase alone from African LDCs. Hopefully, other developed countries will follow our lead in this area.

The Doha Development Round

We’ve also been in the forefront of efforts to make the Doha round of the WTO focus on development--and the Prime Minister brought this perspective to the G8 meeting in Kananaskis last June.

Some concerns are particularly acute. On the public health front, for example, it is crucial that there be a speedy resolution to the WTO negotiations on intellectual property rights and access to affordable drugs for people in developing countries, particularly in Africa, who are suffering from disease epidemics such as HIV/AIDS, malaria and tuberculosis. We are working with the United States, the Europeans, pharmaceutical companies and developing countries to enable access to drugs while protecting the value and role of intellectual property so that incentives to research and develop new and better medicines remain. Negotiations have been ongoing in Geneva, and we hope to have a solution to this impasse soon.

This development focused agenda for changing the rules of global obligations is also evident in Canada's approach to the evolution of free trade in the Americas. At the Quebec City Summit, we not only pursued reduced tariff and non-tariff barriers as a way of raising standards of living in the hemisphere, but we also insisted on a comprehensive approach to hemispheric integration involving a commitment to democracy, combating corruption, enacting judicial reform, and aiding health throughout the Americas. The Democracy Charter of the Americas is a major legacy of the Quebec Summit and the work of the Canadian government and it has already had a impact on countries of the Americas, such as Peru. This is often ignored by critics of the Summit, but somewhat ironically the achievements are largely due to Canadian insistence that civil society throughout the hemisphere be engaged in the process.

Corporate Social Responsibility

In addition to civil society, now more than ever there is scope to promote human rights and human dignity in partnership with the private sector. Making money and defending human rights are not mutually exclusive principles. In fact, company bottom lines are increasingly influenced by the public expectation that they operate in a manner consistent with the principles of human rights. Our government is under pressure to reward and reinforce good corporate social responsibility (CSR) practices by Canadian companies, and to develop policies that address Canadian corporate activity in zones of conflict and regions with weak governance.

Many companies and business associations have recognized this. Not very long ago, the dividing line between business and society appeared to be clearly drawn. According to the economist Milton Friedman, "There is one and only one social responsibility of business: to use its resources and engage in activities designed to increase its profits." This view no longer prevails. In fact, according to a recent poll, there are few places in the world where this view would be well received. In the findings of the Environics Millennium Poll, 53 percent of respondents, for example, in China felt that in order to build a better society, business should go beyond just making a profit, paying taxes, creating jobs and obeying laws. The corresponding figure was 63 percent in India, 67 percent in Argentina and 64 percent in Indonesia. In Canada it was 88 percent, demonstrating that Canadians feel especially strongly about this point.

The Need for Partnerships

L’amélioration du dialogue entre le secteur privé et le secteur non gouvernemental est effectivement une conséquence positive des récentes tendances en matière de responsabilité sociale des entreprises. Les entreprises d’avant-garde et les ONG travaillent avec leurs partenaires et bénéficient, ce faisant, des compétences de toutes les parties intéressées. Le développement responsable pose des défis de taille, qu’aucun intervenant ne peut relever à lui seul.

La communauté internationale dispose de moyens d’intervention pour influer sur les activités commerciales nationales et internationales, et pour contribuer à faire en sorte que la mondialisation soit à l’avantage de tous. Il y a parmi ces moyens les cadres législatif et réglementaire, l’application volontaire d’un ensemble de normes sous la surveillance d’une tierce partie, ou encore l’auto-réglementation des entreprises, souvent en conformité avec des codes de conduite volontaires. Au Canada, nous cherchons de nouvelles façons d’aborder ces questions, notamment en ce qui concerne les rôles de l’industrie, des organisations non gouvernementales et des organisations multilatérales.

Voluntary Initiatives

To date , our focus has been on voluntary initiatives at the domestic and multilateral levels, and on encouraging private sector dialogue based on a three-pronged strategy:

· Promote the concept of CSR through dialogue, partnerships and information sharing with civil society, business groups, and government.

· Support the development of voluntary standards both domestically and internationally, and work with stakeholders to translate them into practice.

· Work with like-minded countries to build greater support for the principles of CSR internationally.

Voluntary initiatives are evolving. Initiatives of yesterday consisted of self declarations or statements of principles; they were vague, with minimal compliance and verification. Today there is increased recognition of the need for effective monitoring and verification systems that can involve third parties, such as NGOs, and that significantly raise the credibility of standards. This is important as it is only by effectively addressing environmental, human rights and labour standards that companies will be able to meet new social challenges.

Conclusion

In conclusion, what many people on all sides of the political spectrum now accept is that liberalised trade and investment are positive things. To paraphrase Jeffery Sachs, in all of modern history, there has not been an example a country that has developed without engaging in trade and integrating into the global economy. However, while the rules that govern international trade are open to all, the outcomes demonstrate that the multilateral trading system still needs improvements. In Canada, we recognise this and are working to change the way the system works, and how we – as members of the government, civil society, and the private sector – work together in the system to ensure it defends and promotes sustainable development and by extension, human rights.

Notre contribution au régime du commerce international est fonction de celle que nous apportons au régime des droits de la personne. Certes, le système du droit commercial est aujourd’hui plus raffiné, mais l’existence d’un régime des droits de la personne soutenu par l’État et par la société civile l’empêche de fonctionner en vase clos, sans considération pour l’impact que le commerce peut avoir sur ces droits. Le Canada a joué un rôle prépondérant dans l’édification du régime juridique des droits de la personne, qui englobe en soi le droit commercial, mais il reste encore beaucoup à faire pour trouver un juste équilibre entre les deux.

Ne nous faisons pas d’illusions. Nous devons absolument réussir. Comme Jean-Louis l’a écrit,

« La croissance et le développement des pays intermédiaires et des pays à faible revenu représentent des éléments majeurs de la stabilité du monde. » [ii]

Cela sera d’autant plus vrai dans les années à venir, lorsque des pays s’ouvriront véritablement, comme la Chine par exemple, où les producteurs et les consommateurs deviendront les moteurs de la croissance de l’économie mondiale, et où les problèmes relatifs aux droits de la personne demeurent particulièrement graves, pour dire le moins.

In my mind, Canada should be the model of a socially responsible trading nation -- perhaps we’re not quite there yet. Still, for most of the world, we are also a model of what a peaceful, accepting, plural society should look like. We’re also a country where 45% of our GDP and 1 in 3 jobs is tied to trade. Indeed, we have a responsibility to ensure that both these aspects of our country compliment each other fully.

I wish you well in your discussions today.

Thank you. Merci.

[ii]. Ibid, p.211.

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