The Tariff Home Companion: A podcast series with Rambod Behboodi and Stephen de Boer

Rambod Behboodi:

This is Rambod Behboodi, Senior Counsel at Borden Ladner Gervais in Ottawa. I'm here with Stephen de Boer, former Canadian Ambassador to the World Trade Organization. And this is The Tariff Home Companion, a new podcast to shed light, not heat, on trade and tariff issues affecting Canada and Canadians.

We're back, to talk trade. Last time it was about CUSMA and the path forward. In this episode, we are going to zoom out and look at the global landscape. The WTO.

Stephen and I will, as usual, provide a bit of background. We are then joined by a stellar figure, in not just Canada's trade law firmament, but globally, to provide some perspective.

In a different context, under different circumstances, 2025 would be a landmark year in global trade law and policy – indeed in global economic relations.

Only last week, the WTO Agreement on Fisheries Subsidies entered into force.

It's a remarkable achievement – an agreement that seeks to control and reduce subsidies that contribute to overfishing. It's an important crossover between trade and the environment, and a key compromise between developing and developed economies.

And even more remarkable that it happened this year, the 30th anniversary of the WTO itself.

And yet, neither has made it to the headlines of major media in North America.

What does it all mean? Why should we care? What is the WTO?

And if an agreement enters into force and Canadian journalists are not there to hear it, did it ever happen?

Let's take a step back. Last time we started in 1854. This time we go back only eight decades.

To the end of the last global war.

The victorious powers, in order to avoid the economic and trade circumstances that had contributed to the outbreak of World War II, established multilateral institutions to cover trade currency, stability, and economic development.

The General Agreement on Tariffs and Trade, which entered into force provisionally in 1947, was not a free trade agreement. It required though that signatories agree to ceilings to tariffs, and established a framework for periodic multilateral negotiations to progressively reduce those tariffs. A truly reciprocal arrangement, if you will.

It was wildly successful in those rounds of negotiations.

Naturally, the parties – having got significant tariff reductions all around – got more ambitious.

In successive rounds, they negotiated a series of codes covering trade remedies, subsidies, and non-tariff barriers.

And they developed increasingly sophisticated dispute settlement mechanisms.

Eventually, they agreed to the establishment of the World Trade Organization. The WTO started working in 1995 – with 128 members and covering 90% of global trade.

Stephen de Boer:

So as of August 30th, 2024, the WTO has 166 members. Areas of coverage include, but are not limited to, agriculture, textiles, and clothing, banking, telecommunications, industrial standards and product safety, food sanitation regulations, and IP.

There are also core fundamental governing principles. Trade without discrimination. Freer trade, gradually, through negotiation. Predictability, through binding and transparency provisions. Promoting fair competition and encouraging development and economic reform.

The WTO's mandate to ensure that trade is as fair as possible and is open, as is practical, is fueled by negotiations.

As noted above, a long history of negotiations by signing countries led to the creation of the WTO. The organization's agreements thus are the result of negotiations. Notable negotiations include liberalizing telecommunication services in 1997. A 2001 work program that included rules on anti-dumping and subsidies and IP. A multilateral accord, the first of its kind reached at the WTO, in 2013 to cut trade costs and lift global exports by as much as $1 trillion US dollars per year, which is referred to as the Trade Facilitation Agreement. Expansion of the Information Technology Agreement in 2015 to eliminate tariffs on IT products valued at over $1.3 US trillion per year. Amending the WTO IP Agreement, easing poorer countries access to medicines. The Ministerial Conference in 2022 adopted the landmark Fisheries Subsidies Agreement responses to the food crisis and COVID-19 pandemic, and endorsed further liberalization for services domestic regulation.

The WTO and its members will continue to facilitate negotiations to establish reform agreements and regulations.

And this list does not undermine the notion that this is a dysfunctional organization. It is obviously working, albeit at a slow pace.

Another fundamental provision is with respect to Trade Policy Review Mechanism. Surveillance of national trade policies is a fundamental activity of the WTO and is controlled by the trade review mechanism.

These reviews take place in the Trade Policy Review Body, and its main goal is to enhance transparency of members trade policies. All Members are subject to review, and Members with the four largest shares of world trade are mandated to be reviewed every two years. The next 16 biggest trading Members are to be reviewed every four years and others are to be reviewed every six years.

The objectives of the reviews are to increase the transparency and understanding of countries trade policies and practices through regular monitoring, improve the quality of public and intergovernmental debate on the issues, and enable a multilateral assessment of the effects of the policies on the world trading system.

The reviews focus on Members' own trade policies and practices, while taking into account the countries' wider economic and developmental needs, their policies and objectives and the external economic environment that they face. These reviews are seemingly meant to encourage governments to abide by WTO rules and fulfill their commitments.

Another one of the WTO's key activities is to promote developing countries' participation in the global trading system. Thus, building trade capacity is essential. The WTO provides assurance to building trade capacity through a variety of ways, but mainly by instructing developing country delegates on how their countries can gain through the trading system.

Thus, the vast bulk of the WTO's technical assistance spending is dedicated towards helping officials better understand complex WTO rules so that they can implement WTO agreements in positive ways.

It also comes in other ways, and mainly through WTO cooperation with other organizations to help build more efficient ports and roads, educate entrepreneurs, provide customs officials with automated equipment, for example.

As some WTO Members do not have the human, institutional, and infrastructural capacity to participate effectively, the WTO strives to accelerate and contribute to development.

The Doha Declaration of 2001 has played a huge part in this mandate. It was seen as a new commitment from the WTO Members on technical cooperation and capacity building. The Doha Declaration spurred on a major round - the so-called development round - of negotiations, and this round has largely been declared dead, but remains arguably a stumbling block to further liberalization efforts and continues to animate development discussions at the WTO.

Rambod Behboodi:

The WTO was also established to serve as a platform for the settlement of trade disputes between its Members.

What's a trade dispute?

A dispute arises when a Member considers that another Member is violating an obligation that it has negotiated and agreed to under the WTO Agreement, and where bilateral diplomatic attempts to resolve it are not successful. Instead of attacking each other with unilateral measures, the WTO Agreement requires its Members to bring those disputes to something like an international court.

The Dispute Settlement Body of the WTO is the highest diplomatic body overseeing the rules-based settlement of trade disputes in the WTO. But the real work takes place in the panels and, when it was still functioning, the Appellate Body.

Panels consist of international trade law or policy experts. The Members and only the Members, these are the governments of the WTO – governments of the Members of the WTO – may bring legal arguments backed up by evidence and expert testimony before impartial arbiters, who will then decide whether a claim or violation has been made out. After that, in principle, there's an appellate procedure.

The Appellate Body of the WTO was a Canadian innovation. It was established in 1995 to bring a measure of security and predictability to dispute settlement between Member governments and, in particular, to ensure that – and strengthen – the legitimacy of arbitral findings and recommendations by panels.

The Appellate Body was conceived initially as a mechanism to correct for egregious errors; the prospect of an appeal, of correcting panel findings – in fact of a second bite at the apple proved too tempting – however. Starting with the first case under the WTO, appeals became routine.

And the Appellate Body proved, as an international judicial mechanism, successful beyond anything imagined in 1995.

That success, that routine use of the appellate procedures, in the end grated against key interests in the United States. The US eventually refused to allow Members of the WTO, to appoint, Appellate Body Members. And, the term of the last sitting appellate body Member expired on November 30th, 2020. This plunged the dispute settlement mechanism of the WTO into a crisis that it has not yet been able to recover from as an organization.

Nature – and multilateral organizations – hate a vacuum. And so it was that Canada, the European Union, and other like-minded countries established an interim appellate mechanism, the Multi-party Interim Appeal Arbitration Arrangement or the MPIA for short.
We are exceptionally fortunate today to have with us Canada's first nominated member of the MPIA, Ms. Valerie Hughes. Valerie has had an incredible career, and I have been particularly fortunate to work for her, and with her, and alongside her, across these past thirty years. Her journey has taken her to the International Court of Justice, two senior positions in the WTO, head of the Trade Law Bureau of the Government of Canada, and Counsel to the Department of Finance. In addition to teaching and private practice.

And now she can talk to us, not just, about the WTO, but the rules-based framework governing trade more, more generally. Val thank you so much for coming here. Let me start by asking a softball question.

Is the WTO relevant still?

Valerie Hughes:

Well, first of all, thank you Rambod for inviting me to join you and Stephen on this podcast today.

Is the WTO relevant? You bet it is. This is the only place where you have 166 members developed, and developing, and least developed that are working together on a lot of issues. You just told us that they, this year agreed, came into force the fisheries agreement on something extremely important to the world, the declining fish stocks.

So this agreement will support governments in eliminating subsidies that, that support overfishing. So there we have a very key, a key example of how it is relevant. We also have the dispute settlement mechanism that you were talking about. It is, it has been, I think, the most incredible and important and successful international dispute settlement mechanism in history. You compare what the ICJ did you to what was able to be done in the WTO over 600 cases filed.

And many, many, successful, very complex disputes, dealt with. And they're still bringing disputes. Governments are still bringing disputes, many disputes to the WTO to be resolved. Even though the Appellate Body is no longer functioning, the panel system is still working. And where else in the world, if you have a dispute against China, are you going to bring it about trade?

Nowhere else. It's the only place to go.

Stephen de Boer:

So I, I understand all of that, but we've got one significant Member of the WTO, the United States who, has undermined the Appellate Body process, is now engaging in activities that does violence to one of the fundamental principles of the WTO. So how does the WTO move forward or how should they be engaging with the United States in that forum?

And I would also, I would note there's nothing right now from the United States that suggests that they would leave the WTO. There's been no threats from them, but, but how, how would members engage, or what is the role for the United States? What is the role of the membership in, in moving forward?

Valerie Hughes:

Well, the United States was of course, one of the principal crafters of the organization and one of the drivers of the organization, their leadership was invaluable to the organization. And it started to pull away, even during President Obama's term when there were concerns about how the Appellate Body was resolving disputes. So it has come now a long way, away from what the United States used to be to the WTO.

And indeed, they've not even paid their annual contribution for this year, which is about 11% of the WTO budget. So that's significant and it's having an effect. I was there just last week and there's a lot of contracts that are not being renewed. There's, technical assistance that is being limited, so there's a lot of impact just because of the United States not paying their contribution. But more importantly, I think is the lack of their leadership. They are not the, the leading discussions on important issues like the environment, like e-commerce, like digital trade. The, the places where the WTO needs to move forward to, to really have an impact on, on, on trade as it goes forward.

And also regrettably, the United States is not, not at all, concerned about violating their, their obligations under the Agreement. Things that we've seen lately about imposing different tariffs on different countries is nothing like the non-discrimination rules that the WTO calls for. So we do have a problem, but there are 165 others that are still working there and are still bringing their interests forward.

And I do believe that the United States will continue to participate, just not in a leadership role. And I, and I think the United States, like you say, it hasn't said it's going to leave. They did threaten that when President Trump had his first term. It didn't happen. We haven't heard it this time. And also, interestingly, they appointed a reasonably, recently, a new ambassador to the WTO, who has, got a good reputation in the field. And they also have a new, what they call the Deputy Director General. An American that is apparently from the, you know, Trump Circle, someone who is respected by, and who respects, President Trump. So by putting these two people in place, it suggests to me that they're going to be there, perhaps not the leadership role, but they won't undermine it. And we have 165 others. The European Union, Japan, India. We have Brazil. We have a lot of countries that are very powerful and, and doing a lot of, of good work, and I suspect it will continue.

Rambod Behboodi:

I think, one, one thing that is, obviously distracting from the bigger picture is that the question of tariffs is dominating the conversation. And the, this differential imposition of tariffs, obviously they're important because, the United States is violating Articles I and II of the GATT, I mean, the two foundational principles. At the same time, I think, what is getting lost, in the, in the conversation is that the WTO Agreement covers a whole lot of other disciplines, other areas.

And they, those continue to be respected. We have not yet heard from the United States or elsewhere, that for example, countries are going to go ahead and impose sanitary and phytosanitary measures, food safety measures without a scientific assessment, for example, or that they're going to have discriminatory technical regulations.

So I'm, in a sense confirming, your observation about, about the WTO, continuing to be relevant. The question I have though is that, do you think that will continue or is it likely that this opening of the door by the United States of the, the violations, key violations of the two foundational principles of the organization will encourage others to take a perhaps more cavalier attitude towards, towards their obligations. And not, not to renounce the WTO, but rather to, to start picking and choosing which obligations they're going to, they're going to, honour.

Valerie Hughes:

Unfortunately, it probably will encourage some to be less vigilant. We were, Canada was not, absent in doing that when the tariffs were put on before.

And Canada retaliated with its tariffs, obviously would, they would probably, the Canadian government would argue that they had, justification for that under the rules. But in any event, you're going to see others. And yesterday, only yesterday we saw someone be, an EU official when they were discussing the, raising of tariffs on steel, saying, well we're not going to impose rules on ourselves that no one else is committed to and no one else is complying with.

The trouble is that there's a lot of, there's a lot of, for us to lose as a middle power and for various countries to lose as, as not the United States in quitting that system and, and, and violating the rules. Like you talked about, food safety, like you, the variety of services, agreements and, and rules that are in play the intellectual property rules, the protection of intellectual property. So have a lot to lose as a Canadian, the Canadian government, the Canadian people, and in countries like ours. So yes, there will be violations. The tariffs area in particular, I'm sure we will all see retaliation and counter tariffs and things that have happened before.

But I think the, the core fundamentals will still continue. And what the WTO allows is something called a specific trade concern. So you don't have to bring a full fledged dispute, but you can air your disputes. And this is happening more and more often. And so you're having opportunity to have this transparent airing of concerns.

And so I think it will. Yes, there will be some holes and yes, we, people will poke at some of the rules, but overall I think it's in the benefit of the 165 others to keep doing what they've always been doing, which is generally complying with the rules.

Stephen de Boer:

So what next for the WTO? You've made a pretty compelling case as to why, countries should continue to, engage, why they should be following the rules.

But what's on the horizon for, and I, I'm going to park just dispute settlement because that one doesn't seem like it's, doable in the, in the short term. But what should the WTO be thinking about? They're coming back from, from the summer holidays. What's, what's the work? What, what should it look like?

Valerie Hughes:

Well, they, they keep telling us that they are working on reforms and, there are a variety of things that they want to reform. Dispute settlement, let's put that aside. But it's the way they work and the deliberative function. What the WTO requires in the rules is that things are done by consensus. And that means that one "no" stops everything.

And that had its benefits, as the WTO was created in 1995 and you know, there was a lot of, buy-in by developing countries, especially because they had, you know, they had a vote just like the economies. And so what we need to understand is that reform is difficult when you have a consensus-based system.

And what we're seeing is something that probably is what they need to do going forward is have more of these plurilateral and not a hundred percent consensus agreements. And working towards things that are important to a number of Members, if not a hundred percent of Members. And have them come to agreements on things like digital trade, on e-commerce, on environmental goods, on fisheries subsidies because they have to continue work there. So if we can have countries work in these plurilateral negotiations, that are eventually open to anyone else that wants to be a party to that, this is where the WTO has to, has to, you know, put, put its emphasis.

Now, there is more to do and the, we've seen when we had the pandemic, how this disrupted, trade flows. How, there were, export restrictions on medical equipment. All of these things the WTO was, was very much involved in trying to work through those problems. And I think these are the kinds of things we have to be ready for that kind of, disruption. We have to be ready to address supply and demand, and these supply chains that, that get disrupted by, these pandemics or, or world events.

So there's lots to do. I don't think that, pens will go down. And what happens in the WTO every day of the week is they meet and discuss the various issues and make sure that the agreements are being addressed. It'll continue perhaps more slowly because you won't have the leadership of the United States, but it will continue.

Rambod Behboodi:

So about 20 years ago when we first worked together in Geneva, the concept that was in vogue was "variable geometry". Are we, I mean, not the, the name, doesn't seem to be in play anymore, but that's, that's what you are, that's what you're suggesting will, is likely to happen. In the same way that we now have a patchwork of trade agreements around the globe, variable geometry, in terms of trade liberalization within the WTO, there will be variable geometry in terms of rights and obligations.

That could go, that could allow the WTO to continue. But what does that do to the, to the core bargain at the heart of the WTO? Which is essentially the thing that we've always heard, "nothing is agreed until everything is agreed." That developing and less developed countries agreed to, a certain set of demanding obligations in areas that they really didn't, weren't interested in. In return for getting the kind of access that now they're, they're being denied. If we bring that patchwork in, how will the ethos of the WTO continue to work?

Or is it that that ethos will now have to change?

Valerie Hughes:

Well, I think there's two things. One is that the WTO does provide for plurilateral agreements. It's in the system and there are a number of them. Government procurement is one, and probably the most active one. So that it doesn't really mean that the WTO is against or prohibits plurilateral approaches.

And we had this in, you know, Stephen mentioned the IT Products Agreement that's, not everyone was part of that at the beginning, but it covered a substantial amount of trade for those governments, those Members interested in reducing tariffs on IT products. Not everyone is interested in access to medicines, but for those countries that were interested, that amendment, went through.

So it goes, it doesn't go against WTO ethos to have plurilateral approaches. But by the same token, if you do have, you know, the smaller economies, the developing countries that don't feel they have the power or the ability to influence the system, influence what the WTO is going to study or negotiate that will of course undermine, the, the system more broadly. Because, it is because it covers 98% of the world trade that it is a, it is an organization that's going to continue that is not going to collapse because it just covers, it's, it's just too big to fail.

We've heard that in some language. So, but it, we do have a number of what the, a number of governments that are pushing forward with separate initiatives. And you mentioned one, which is the MPIA. It started with 19, 18 or 19 Members. Now there's 27. And it, and as you know, for example, Japan wasn't a part of the original MPIA group. And then it had a dispute that was going to go to appeal and it didn't want to have the appeal into the void because there was no appellate body to decide. And Japan joined.

And so I think that's what's going to happen with these various variable geometry approaches. It'll work.

Stephen de Boer:

My own, my own observation is that it, it is variable because the economies are variable. There, there's a lot of countries that are not engaged in certain segments of the international economy.

So why should they be subject to new rules or why should they engage? I mean, civil aviation is a great, a great example. So by, by definition there's a patchwork there already. But I, based on my experience, I would suggest that it, it also means that there are some Members, some fairly large significant Members of the WTO who are going to have to change the way that they operate and that the, and the way that they, think about, think about these things.

I mean, to the early, to your earlier point, it seems to me, if the US is breaking the rules and that may encourage others to break the rules. But hopefully they will come to their senses and realize if there ever was a case for rules and all of us following them, this is it. Because now we know the consequences.

So maybe a year from now if we have this conversation, we'll see a different situation. Trying to be optimistic here.

Rambod Behboodi:

You were just in, Geneva. You attended the public forum. What's the mood?

Valerie Hughes:

The mood is subdued. I talk to, of course, a lot of, of the members of the WTO Secretariat staff.

They're, they're feeling, they're feeling that their jobs are not secure. They're, you know, they, they cannot do any sort of traveling or missions or go to conferences. Temporary contracts are, are being cut. So the staff itself is feeling a little bit under siege. The Membership as well is concerned because of the lack of leadership by anyone. United States being one. But there isn't really a lot of leadership amongst the Membership. You haven't, you've seen China seek to, take a, a lead on certain things. They've just announced that they won't claim developing country status going forward. You see them trying to be the, the big guy around in town. But you know, there's also China's, industrial policies that are bothering a lot of other members.

So you don't, I don't see them really being the lead that everyone is going to look to. There's not a, there, there's a vacuum. There's a bit of a problem. There's a bit of a feeling of, you know, now what? They are working on these reforms heading for a ministerial conference in, in the winter of, of 2026.

That will be where the core work is going to go. Are we going to get anything agreed then in terms of some of the reforms on the way we work. But I think it's subdued. It's, it's, there was some excitement that there was a US ambassador, that was named and, and put in place. There was excitement that there's this new Deputy Director General that seems to have the, the ear of, or at least, the, you know, high regard from the president.

So that would be something that people are going to hang on to, but it is subdued.

Stephen de Boer:

Is there a role for Canada here? You talked about a leadership void. Is there something Canada can be doing or showing leadership?

Valerie Hughes:

You know, perhaps in my naive way, I always, think that Canada, we were, you know, part of the quad in the old days.

Very, central role in developing policy, and as Rambod mentioned, you know, Canada was at the forefront of the creation of the Appellate Body. It was Canada that came up with the idea of having a, an international organization when, and the WTO became that. So I believe that Canada does have a role. One, because we aren't the United States, but we have a lot of the same sort of development as the United States has.

Our economy is, I don't know, 10th in the world or something – it's not the biggest, but it's not, it's not, you know, small enough to, to be irrelevant. I do think that Canada can play a role because I think we're trusted and I, I do see our current Prime Minister having an international face on things, being out and, and promoting multilateralism or at least, some sort of, international approach to trade.

I would think that there was, there was a lot of people calling for, a lot of Members calling for a multilateral group coming together to, to lead things and to have some, someone come forward. And I've heard 2, 3, 4 times that, you know, Canada could be a good leader of that group that is pushing forward as a sort of a collective action kind of group.

And I've heard Canada's name said a few times as a, you know, an ideal leader. We're not the United States, we're not China, we're not India, we're not Brazil, we're not the EU. It's a, you know, you have to distinguish yourselves from the kinds of interests that those other groups represent. And Canada seems to me the neutral, going back to the old days, honest broker and, and with our current Prime Minister being, sort of doing what he's doing I see, I see a role for Canada and I, I would hope that Canada steps forward.

Rambod Behboodi:

You mentioned Canada and, and China, and, there are, I, I suppose two, crosscurrents there.

The first one being that our hands are not clean either in some respects. we impose unilateral measures on Chinese EV vehicles. There, there, there may be any number of good industrial policy or, or security reasons for it. But, but as it happened, we had the option, last year of, referring the matter to the panoply of agencies and departments and investigative authorities that we have to do the, to do it properly. And then we decided that we're just going to go ahead and impose the measures. And that has had consequences. So just putting that out as a, as an asterisk on the, on the honest broker.

But then there is the other angle, and it is that, the, China, as you mentioned, has, said that it's not going to assert its developing country status on, in respect of a number of obligations. And yet, the core issue with China's industrial policy remains, remains unsolved and, one could argue in the context of the current rules and the current negotiating framework, unsolvable. And maybe – we don't want to impose too much on your time, but maybe, one of the final observations on your part – how, so the first one, the first issue being, can we really serve this honest broker function, if the perception is that, we continue to have to, abide by continental concerns? That's the first one. And second one being, how do we address reform in the WTO if the, the Chinese industrial policy, overcapacity across the board, isn't in some way addressed?

Very, very easy questions.

Valerie Hughes:

If I knew the answer to that last question, I'd be, running the WTO myself today, I think. But just to go back to whether or not we, you know, we don't have clean hands. Yeah. We, Canada and China, were the only ones who put countermeasures or tariffs on the United States, the only ones in the world.

But what I think we have to understand and why we put, you know, a hundred percent tariffs on EVs from China. Where are we located? Geography is going to compel us to do certain things. And we are going to be, perhaps like the EU says, we're not going to impose, certain things on ourselves, you know, that others wouldn't.

So yeah. Not clean hands completely. But you know, I think that when you look back and you see where Canada sits geographically there, I think people will give us a bit of a, a buy. And I do think that that's an important ... maybe they think we can bring the US along a bit. Maybe we can have an influence a bit on the United States because we work with them on EVs or on other policies.

How are we going to fix China's industrials policy? And I think most people would agree that the current rules at the WTO are insufficient to keep them in check and, and to, you know, state owned enterprises and the way they're acting in the, in commerce. We don't have the answers. But over time, you know, we just have, we have to be positive that they're, you know, we fix little things along the way.

I can't see us fixing that very quickly. But we can address other challenges and we can't let that get in the way of making progress on the second fisheries agreement. On how AI is going to, be dealt with. How digital trade will be dealt with and how we can do something about supply chains. I, why if we can't fix everything, it doesn't mean we don't try and fix some things.

Rambod Behboodi:

Well, we're, yet again, ending on a positive note. Qualified positive note, but still a positive note. This brings us to the end of our session. Stephen and I would like to thank Valerie Hughes for exceptional insight, today. As well, a project of this kind requires a lot of work to bring together.

In particular, honorable mention again is reserved for Alex Zoutis our articling student, and our producer Jason Chute. And of course the entire technical staff of BLG.

We'll be back, in three weeks to talk sectoral impacts of the current Canada US tariff spat.

Rambod Behboodi:

This is Rambod Behboodi, Senior Counsel at Borden Ladner Gervais in Ottawa. I'm here with Stephen de Boer, former Canadian Ambassador to the World Trade Organization. And this is the Tariff Home Companion. A new podcast to shed light, not heat on trade and tariff issues affecting Canada and Canadians.

We're back to talk trade.

In our first outing, we discussed the CUSMA. This is the free trade agreement President Trump negotiated with Canada and Mexico in his first term, an agreement that replaced the North American Free Trade Agreement, or the NAFTA, and was supposed to provide a solid foundation of secure and predictable trade for the three parties for decades to come.

It was not to be.

In our second episode, we explored the World Trade Organization, a multilateral trade institution that was the culmination of a 40 year post-war project – an American project – to establish rule of law in global trade and economic relations, and to advance security and predictability in international commerce.

For all its promise, that project has also had to scale back its role and ambitions.

What's Canada to do?

Last time we talked to a former Canadian trade minister and former WTO Ambassador.

We saw that throughout its history, starting before Confederation, Canada has had to grapple with two competing visions.

One, driven by economic necessity – by geography itself – spoke to closer integration with the United States. The other, motivated in part by strategic need to avoid dependence on one market, no matter how big, no matter how friendly, sought a "Third Option".

The Canada US Free Trade Agreement and the NAFTA were a specific repudiation of the Third Option as a principal policy objective.
But – and this needs to be emphasized – both Liberal and Conservative governments since have pursued diversification as a desirable outcome.

That's how we ended up with a healthy, though not excessively ambitious network of free trade agreements.

We're back to explore diversification, and we're fortunate to have two energetic and visionary political figures with us today.

Stephen and I will, as usual, provide a bit of background. We will then ask our guests to walk us through the possible, the probable, the realistic, the good, and perhaps the unattainable perfect outcomes.

Let's go back to the basics.

To be very simplistic, trade has two directions: import and export. Both are important for a healthy economy. There are things that we can produce. There are things that we need to produce – the goods we produce. And then there are things we could produce, but probably shouldn't because simply Canada's highly educated workforce should be working on high value added stuff.

Trade also has two components, goods and services. When we talk about tariffs, we're talking about imports of goods. There have been times when Canada and other countries have imposed taxes on the export of goods for various reasons.

Then there are services and the whole import/export issue gets a little bit more complicated. Because, to begin with, all goods have some sort of service component. When a bunch of radishes is harvested, right there, there's a service. So is washing it and packing it and distributing it and transporting it and selling it. And some goods have more of a service component. Because it's in the news we can think of movies. The physical reel of course, is a good, but clearly the value of a movie is not in the physical good itself.

Import, export, goods, services, add intellectual property, and it all gets really complicated.

Tariffs capture the value of the good as it crosses the border, but there are all manners of other things that cross the border that tariffs do not address. I mention this because we will be talking about trading goods, but we need to bear in mind that there is a massive other sector, services – that's right there – in which the United States has a healthy surplus and that is not talked about as much.

The US also earns money through foreign direct investment and intellectual property. These inflows also do not make it, at least not fully, into the trade statistics or into the discourse.

Import, export, goods, services, capital, intellectual property. So far so good, but perhaps not yet.

There's one more thing I want to talk about because it inflects the Canada-US trade discussion and any talk of diversification, and it is the notion of value-added: when we export a good, how much of that value stays in Canada.

You remember I mentioned the highly educated Canadian workforce. Now to the numbers, let's zoom out to the global numbers because they tell an interesting story.

Last year, Canada's exports of goods and services were around $950 billion. Services were about a fifth of that figure. While imports reached about a trillion dollars for the first time. Let me break this down a bit. Mining, and oil and gas extraction, were the largest drivers of economic growth. Travel and financial services significantly contributed to overall export growth as well.

Three other broad sectors were significant. Professional, scientific and technical services, information and cultural sectors, and financial and insurance in the services sector. Then you have agriculture, forestry, fishing and hunting, and they remain important elements of our international trade.

I hear the gallery.

"Yes. But tell us about tariffs."

We'll get there.

These are Canada's top five goods exports by category. The first by far is oil and related products. The second is autos and related products. Then we move on to machinery, things like nuclear reactors and boilers. Fourth goes to precious metals and stones, and then electrical and electronic equipment.

You will see that nearly two thirds of this figure is natural resources.

What about our imports? Here are the top five: autos, machinery, electrical and electronic, oil and related products, and plastics.

Right off the bat, you will see that the vast majority of this batch of imports is manufactured products.

So we sell primary goods, other people work on it, and then they sell stuff back to us with a premium.

I exaggerate, but that essentially has been the pattern of Canadian trade throughout our history.

Okay, so where do we sell our goods?

The numbers are striking. Over the last 10 years, 97 per cent of Canada's crude oil exports in value went to the United States.

We can expect some change to this as the Transmountain pipeline expansion comes online, though likely only on the margins. Already in 2024, 6.1 per cent of crude oil exports were to non-US markets upfront, 2.8 per cent the year before in the month of October 2025, as much as 70 per cent of crude oil departing from BC was headed to China.

Trade with the Asia-Pacific region suffered a decline in 2024, but it's picking up again in 2025. As for other markets, we're seeing a considerable expansion of exports to the EU and the UK. Imports up 8% in January 2025 to October 2025, exports up 22 per cent in that same period. Then we see increase in trade activity in smaller markets in Central and South America and also in Africa. Imports from Africa up 42 per cent; exports up 20 per cent.

So this is the stuff that we already produce and sell. But what about prospects?

The biggest of these prospects is liquified natural gas or LNG. This is natural gas that has been cooled, compressed, and liquified for transport. LNG has become a focus of interest, especially since Russia's invasion of Ukraine in 2022 and the potential risks for Ukraine's European allies of losing access to Russian gas. Major terminals are the works in BC facing Asian markets. There's talk of terminals out east to serve European interests.

Stephen de Boer:

Thanks Rambod.

As we now turn our focus to the future, it would be useful to set out some of Canada's efforts to continue to facilitate and encourage trade both domestically and internationally.

In the first place, it's useful to review the internal changes being made to propel domestic trade.

On June 30th, 2025, the government of Canada announced that all remaining federal exceptions from the Canadian Free Trade Agreement will be removed. So a list that started with 53 exceptions or barriers now reads zero. So what drove the extinguishment of these exceptions? It really came down to procurement and a goal of allowing Canadian businesses to have an opportunity to become more competitive nationwide.

In 2023, more than $530 billion worth of goods and services moved across provincial and territorial borders. This represented almost 20 per cent of Canada's GDP. Removing barriers to increase these numbers even further were of course important. Now, when we're talking about internal barriers, we can really break things down into four categories.

These are natural, prohibitive, technical, and administrative barriers.

Natural barriers include geographical barriers. I think it's easy to understand those in the Canadian context. The mountain ranges in Western Canada and the sheer geographic breadth of Canada spring to mind.

Prohibitive barriers include provincial or territorial laws that may unintentionally prohibit internal trade. For example, restrictions on cross border purchases of alcohol.

Technical barriers would include something like vehicle weight standards, which are sector specific regulations that may differentiate between provinces and territories.

And finally, administrative barriers include provincial or territorial permits, licensing and other paperwork requirements that may be imposed on businesses operating in multiple jurisdictions.

Now more than ever, the need to encourage domestic trade is paramount.

For example – and for some of our listeners this may pique their interest – internal trade ministers from 10 jurisdictions have agreed to an MOU committing to advance direct-to-consumer alcohol sales. This would give consumers the ability to order their favorite Canadian wine, spirit, beer, or other alcoholic beverages directly from the producer. Provinces and territories are working towards finalizing detailed agreements by May 2026.

And finally, as we are lawyers, we can't forget to mention Bill C5, the One Canadian Economy Act. The act received Royal Assent on June 26th, 2025, and enacts the Free Trade and Labour Mobility in Canada Act and the Building Canada Act.

The ACT will expedite nation building projects and continue to remove federal barriers to internal trade and labor mobility. The government of Canada will consult provinces, territories, and indigenous rights holders to identify projects of national interest. Under the Building Canada Act projects will be evaluated based on criteria such as strengthening Canada's autonomy, resilience and security, economic and other benefits, likelihood of successful execution, advancing indigenous interests, and supporting clean growth and climate objectives.

The goal is to accelerate nation building projects while ensuring environmental protection, indigenous rights, and economic opportunities. All of these measures seek to further develop and facilitate internal trade. However, Canada is of course not done there.

I will now touch on some of the external measures the country is focused on. As we look ahead to the 2026 Olympics, it would be wise to discuss Team Canada, although we won't be taking a deep dive into medal hopefuls, we will discuss Team Canada trade missions.

These missions are large scale minister-led missions, including to the Indo-Pacific region, and as Rambod touched upon, this is a prominent market for Canadian trade.

The missions prioritize innovation sectors where Canada has a competitive advantage. Team Canada trade missions aim to develop or to help open doors for Canadian companies, both large and diverse and small and medium sized enterprises. There is a specific focus on those owned by 2SLGBTQI+ individuals, black and other racialized Canadians, indigenous peoples, women and youth.

These missions strive to provide these businesses with access to business and government decision makers, on the ground trade support from Canada's network, valuable market intelligence, and opportunities for growth and visibility. The programme consists of visiting one or more countries over one week periods and spending an average of two days in each city.

Participants will learn about doing business in the host market and gain exposure to their social and business cultures.

Another service available to Canadians is the Trade Commissioner Service. The service looks to provide expert trade advice to Canadian businesses to help them expand and exceed globally.

The service also offers funding, missions and support at trade events. Notably, Canadian companies that partnered with the service during the period of 2000 to 2022 achieved 20% higher export value and reached 20% more international markets. The Service supports exports, foreign direct investment, and science, technology and innovation.

The Trade Commissioner Service helps Canadian businesses grow internationally by providing tailored advice, market intelligence, and connections through a global network of trade commissioners in over 160 cities.

To support exports, the Service offers, advisory services, market assessments, qualified contacts and problem solving. It also offers a funding programme to Canadian exporters, covering up to 50% of costs up to a maximum of $50,000 to help small and medium enterprises enter international markets. To encourage foreign direct investment, the Commissioner Service assists global companies looking to establish or expand in Canada, supports this mandate by providing market intelligence, site selection, guidance, and connections to local partners.

To help Canadian innovators take advantage of global opportunities, the Service may connect businesses with international partners with access to cutting edge technology and facilities, global value chains, and investors and funding.

Much like I discussed with the Team Canada's trade missions, the Trade Commissioners Service will also organize trade missions and facilitate business to business meetings as well.

The goal is always about relationship-building and exposure to international opportunities.

As we previously discussed the current state of free trade agreements in Canada, and what got us to this point, we wanted to take a minute to turn our minds to the future. You know what's next?

Well, just recently on September 24th, 2025, Prime Minister Carney announced the new Canada-Indonesia Comprehensive Economic Partnership Agreement.

This will be Canada's first ever bilateral trade agreement with an ASEAN country. This agreement will eliminate or reduce tariff and non tariff barriers, create a more transparent trading environment, and open new opportunities for Canadian workers and industries. These opportunities will open up sectors such as clean technology, AgriFood infrastructure, and financial services. This agreement will eliminate or reduce over 95 per cent of the tariffs that Canadian exports to Canada, to Indonesia, sorry, are currently subject to, and the goal is to finalize this Agreement by 2026.

Furthermore, on November 1st, 2025, Prime Minister Carney announced the initiation of free trade negotiations between Canada and Thailand.

A huge step to unlocking even more opportunities for Canadian exporters. And this follows an announcement in December of 2024 of the launch of exploratory discussions for a free trade agreement with the Philippines.

Our previous episode touched on the golden age of free trade agreements and hopefully this is a sign of that era continuing.

Canada has shown its desire to continue facilitating free trade among countries with which Canada has both existing and new relationships with, and as we said last time supporting its economy one free trade agreement at a time.

Rambod Behboodi:

We're fortunate to have with us two important figures in trade policy in Parliament.

I'll introduce them in alphabetical order.

Adam Chambers is Vice Chair of the Standing Committee of International Trade of the House of Commons. I had the pleasure of working with Adam closely on a number of projects dealing with financial services when he was an advisor in the office of the late Jim Flaherty, the then Minister of Finance, and I was General Counsel at Finance Canada.

Yasir Naqvi and I go back to the early 2000s, when he was teaching at Ottawa U Faculty of Law and invited me to give a talk to his class on trade remedies. He then went on to serve as the Attorney General of Ontario before moving to federal politics. He is currently the Parliamentary Secretary for the Minister of International Trade.

Adam, Yasir, many thanks for your time this morning. I know this is a busy week. Really, glad you could make it.

So we heard a lot of numbers, we heard a lot of options. Let me lob a really softball question at both of you, at the outset.

If we have limited resources and if we're pursuing diversification, do we invest more in trade agreements or do we expand the kind of support that we already have, for example, the Trade Commissioner Service or EDC or other, federally, Federal Crown Financial Institutions?

Yasir Naqvi:

Do you want me to start? I think we do all of the above. I think we have to do everything, but I'll take the discussion at a macro level because I think where we find ourselves right now with the level of protectionism that we are seeing in United States is that countries like Canada have a choice to make.

Whether they pursue the Donald Trump theory of economic prosperity, which is to close borders and impose tariffs like the way we used to see before we engaged in free trade agreements.

Or we continue on the path where we open more markets by signing free trade agreements.

I'm of the view that Canada's got to do the latter. Where we continue on the path of finding new markets, so trade diversification does, as a policy objective, become an imperative. So I think these choices are important choices and for Canada to pursue a path of signing agreements with ASEAN countries, Mercosur we are negotiating. I mentioned finalized an agreement with, Indonesia, Philippines, and Thailand are next, are extremely important. But in addition to that, agreements only provide only one set of objectives, which is market access and all of us who've been involved in that line of work, we know they're important but then the trade facilitation piece is extremely important, and that's where Trade Commissioner Services, trade missions, et cetera, on the ground, making sure our businesses, especially SMEs, have an opportunity to then access those markets, take advantage of those market access that have been negotiated through agreements is also imperative.

So my view is we do both, and at this moment we double, triple, quadruple down on both those directions.

Adam Chambers:

Thanks very much.

Thank you very much for having us. It's great to be here with, one of my fellow colleagues and friends.

I would say in terms of limited resources, I think it's one thing to have a number of trade agreements, which we do. You mentioned in the lead in, we're lucky, we have a number of agreements, many of which were started under Prime Minister Harper, and then finally, brought into, final negotiations by, previous government, or the subsequent government of Prime Minister Trudeau.

I would say it's one thing to have the agreements and another one to use them. It's one thing to have the market access, but if no one is actually using it, I think that's where we should be somewhat concerned. And I would say, I'm not sure the numbers of trade diversification over the last, say, decade or even 20 years, actually show much of diversification.

It has come down a little bit from the US or the height, but I would say that there's still a lot of missed opportunity with facilitation in the markets with which we have trade agreements. And just use the budget as an example. I think there's about $4.4 billion of new money for expanding Canada's trading relationships. $4.2 billion is for trade infrastructure ports, railways, et cetera. And the remainder of about $200 million is for the facilitation piece. So I would say that's probably not necessarily large enough.

And then for what you have in existing trade facilitation, how are Trade Commissioners doing their jobs? What do they view their role to be? If you ask them, what, are they supposed to do every day when they wake up? How are they compensated? What is the right metrics that we're going to use to judge them? I think that has to all be part of the conversation. And I, I'm not familiar exactly with how Trade Commissioners are managed globally, but I would ask questions like that in order to try to frame this facilitation piece as being incredibly important.

Rambod Behboodi:

Well we happen to have a former ambassador to Poland, with Trade Commissioners in his office.

Stephen de Boer:

So, a couple of, I tend to, agree actually, what, I think we see here tend to agree with you, Adam, is that what we see here is that we've been very good about negotiating agreements. Canadian businesses have not been very good about taking advantage of them.

One of the, one of the advantages, I suppose, that it's now turned into a disadvantage of being so close to the US as it's been easy to export to the US and it's a little bit, bit, more difficult into the EU for example. So when we look at the Canada-EU context, it's the EU that's trading more with Canada than Canada with the EU.

So there is a Trade Commissioner Service role there for sure. But also to your point, Adam, maybe this is a time to rethink how the Trade Commissioner Service does some of their work. I find it fascinating, for example, that the Trade Commissioner Service in Europe is still organized around member State lines, when in fact it's one single market.

So it shouldn't matter for Canadian companies, whether they're selling into Poland or whether they're selling into Germany. It's all Europe. There, I mean obviously there are some market differences, language being the most notable. But still, so, me, I think there probably is scope for, for, changing or rethinking how that's being delivered.

I'm really curious to know – if I can ask a question here – I'm really curious to know when you're talking to your constituents, is trade and trade diversification an issue? Are your constituents engaging on this issue? And if so, what are their views as to what Canada should be doing?

Yasir Naqvi:

That's a good question.

I represent the riding of Ottawa Center, a lot of public servants who live in my riding a lot of people who work in associated area. So it may not be a hundred per cent reflective of everyday Canadians in many respects. So I, it is always a important disclaimer.

I think conversation comes up, especially nowadays as we try to navigate our relationship with United States as to how else Canada economically could grow. I was canvassing, knocking on doors just on, on Saturday, not that expecting an election coming up or anything, but I, and, so that was the conversation, right? How is negotiations with the United States going? What else are we doing?

I think there is a recognition that we just cannot solely rely on one country or one economy. And Canadians do recognize that we have way too many eggs in the US basket. That we need to do things differently. And we've been talking about trade diversification for a long time. This is not new. I think what they're hoping that this time is going to be real. That we are able to expand our non-US export trade. So I think having a goal as Prime Minister Carney has put out, to double the non-US export, exports, in next 10 years is an important target.

I totally agree with the point you're making. It's one thing to have these agreements. Are you really going, how are you making sure that those, those channels are being utilized – is where we need to spend more time from a trade facilitation purposes. A big part of it, as I am in my role as Parliamentary Secretary International Trade, is I'm finding that businesses are just starting to open their mind to other markets. It's just so easy to do business with the Americans. It's close, same language, same, pretty much the same currency. And when you start looking at places like Indo-Pacific where you have to travel 24, 25, 26 hours to get there, and then you have to build brand new relationships. And, that won't just happen in one trip or we'll take multiple visits.

People are saying, oh, I'd rather sell it to Milwaukee. And I think we need to focus on that aspect as well. And of course, government has an important role to help open those portals or channels, to make that happen.

Stephen de Boer:

What are you hearing, Adam?

Adam Chambers:

I break it into a couple different types of interactions.

You'll have individuals who are, working in the economy, not necessarily working in an export business, but regular everyday Canadians. They would by and large not object at all to trade diversification. Hey, it's a great thing we're signing new trade agreements. If you talk to some business owners, I think you can also separate those into a couple of categories. Those who are heavily levered or connected to the US market already, who are very concerned about, not 10 years from now, but 10 days from now, or 10 months from now.

And I would say the message from those individuals is, hey, great, it's a nice opportunity to maybe sell my wares in Indonesia, but what would be great is if we could just sort this out with the Americans. That would be, my primary objective, like they would say.

Then there's probably some other business owners who are maybe newer in newer industries, maybe within the services sector. They're open to trading with other nations or making their services available. But they don't quite know how to do that yet.

And I would say in my area, we've got a mix of, we have a heavily industrial kind of auto parts type feel to lots, lot of parts of the riding. So that's, there's a serious anxiety related to what's going to happen on certainly the auto sector because of the ripple effects it would have, across the region.

And then also some agriculture.

One of the challenges in agriculture, labeling is a big issue in particular as well in, in Europe. And if you think about Canada's market and then these provincial, provincial bodies, they all have different labeling requirements. Europe has one standard, and the fact that, the entire agriculture market in Canada is not one homogeneous market, that's maybe why you don't see these people taking advantage of some of the opportunities in Europe. Because there's just, they're actually much, they're not just one Canadian market, it's another 10 separate markets all the way along. So I would say I'm hearing a, mix of reactions.

I would say though, in particular in my area, people would like to see the situation with the US resolve to some degree, whatever that looks like.

Is there some kind of certainty we can provide? What's the right number? Are we going to actually ever get a deal? What's that look like?

So I would say that's, the totality of, the reactions I see here.

Rambod Behboodi:

Let me zoom out a bit and maybe focus on, on not the means of diversification, whether it's the Trade Commissioner Service or, more trade agreements, combination of both and so on, but the what?

And, and just to put this thought out there: there is, the last substantive point I made was about LNG. So that's, that seems to be a consensus no-brainer. That going forward, this is the kind of thing that if we can get a national consensus on, on pipelines going, then maybe that's something that we can start developing.

But we're still in the natural resources thing, right?

And, and that, is, developing more LNG pipelines may or may not help manufacturers in Simco North, right? Certainly not whatever manufacturing capacity we have in Ottawa Center.

Is there, is there a path, that, we would be able to diversify, not so much away from natural resources, but into more manufacturing and more services exports?

Adam Chambers:

So the question, is there a path? Absolutely. I think there is a path.

And I think you have to look at the one that I, that would absolutely be zero controversy would be agriculture. The fact that Canadian agricultural products are not only sought after, but generally viewed as high quality.

And for those of you who think that, still care about emissions. You can ship Canadian wheat around the world four or five times before it has the same carbon footprint as a similar product in another part of the world. So I think we have a huge opportunity in agriculture.

But you mentioned, other manufacturing, but services, which is another reason why, you know, being close to the US is a little bit of a double-edged sword. There's a lot of, you can hear the sucking sound of the individuals who want to go and build like a, a tech startup or, a business in the US just because of the market, the access to capital. But if we can keep those individuals and entrepreneurs in Canada, especially in the new economy, artificial intelligence, or just building a business on, that you can serve the globe, but from, say in the tech space.

If you can keep those individuals and that talent here, then I think that's a huge opportunity for export as well. And there are some really great Canadian examples of that, including here in Ottawa. And Ottawa has an actually pretty good history of technology companies, global technology players, actually being based and growing right here in Ottawa.

Yasir Naqvi:

And that's the point that I want to pick up.

In the intro, you were talking about our top five exports and you talked about the goods. And we are, yes still, we have to admit, we are very much a natural resource-based economy. And that's why so much focus, if you look at the major projects that have been announced by the Prime Minister, are really still focused on those natural resources, whether they're mines or LNG, et cetera.

But I think with the evolution for Canada has gone and you spoke about the talent, is our people. We're a small country, but we are highly educated, talented people. I often say that our best natural resources was between our two ears and that's where I think we need to focus more on. So when you talk about Ottawa Center, yeah we may not have manufacturing, but we have got lots of service, the services that are being produced here. And I think that as a contributor to our GDP is an important element. So if you look at the IT sector, the information and communication technologies, that is a big sector and we can do even more here. AI, which is the new revolution that's coming. How is Canada positioning itself from that perspective? This is where we get into conversations around data centers and how much energy we need to fuel those centers. This is where I think really, the other pillar of our economy really lies. Is to leveraging those people, bringing the, attracting the talent from around the world that can create those value added services that the world needs. And we can be really not just be the hewers of wood or oil or water as we were. But actually the creators of these technologies as well, and the services where I think most of our urban centers and those populations, get their, economic wellbeing.

Stephen de Boer:

I don't necessarily have a question, but I found it really interesting one of the things that Adam had to say, when, you talk to your constituents. I think amongst the trade wonkery, if we want to call it that, there's an, we all seem to accept that this is the moment where our relationship with the United States, our trading relationship with the United States has fundamentally changed.

But what I heard you say is that there is still a segment of the business community that is hopeful that this can be resolved with a view of sort of a status quo ante, where we can go back to where we were before. And I'm not saying that's wrong, it's just, it just is not necessarily in step where I think trade policy folks are necessarily sitting.

And I don't know whether that's magical thinking on the part of Canadian business or whether there's actually a bit of realism to that. But I think it's interesting to, for people, for policymakers to be aware of that, that dynamic.

Adam Chambers:

It may not be that, that they believe that we could go back exactly to what it could be, or what it was previous.

I think the question is the current limbo state is obviously not going to be forever. So the faster we get to, and now, it's been all we're going to come up on a year on this, the faster we get to some kind of resolution will provide at least some certainty, and then some decisions can be made about, okay, here's what the field looks like. Am I going to invest my time and resources in trying to maintain the relationships with the US? How does that change the economics of my business? Should I be looking at other markets? What's that look like? I think there's just a desire for some certainty around that. And, the election was primarily fought around the relationship with the United States.

Yes, it may be changed forever, but I think the current state of that relationship is not one that will exist forever. So I think there's a, just a desire for people to say, look, we would like to get this sorted out one way or the other. We see other countries making deals. What's that look like for, what would Canada's look like? Are we going to be at a disadvantage of anybody else? If we get a deal that doesn't put us at a disadvantage versus any other country, then is that okay? Like maybe we could live with that. What does that look like to our economics?

I think that's the desire that you hear from the community. So they're not, maybe not wishing, sure people wish we could go back, but there's a real, a realism that says we'll get a solution at some point. We just have to try to get there.

Yasir Naqvi:

This is the case of where two things can be true at the same time. We've got that great geographic advantage, which we've taken, drawn a huge amount of prosperity by being neighbors to the United States. The rest of the world was always envious of us, that we had this massive, continent, unprotected border, a free trade agreement, integrated supply chains, and how well we've been able to use for our, prosperity.

Of course, we have to work really hard to preserve that, and I think that's one of the effort. How can we preserve the elements of CUSMA that still works for all of them? And we're still in the, in a good place where CUSMA compliant goods are still has zero tariff attached to it. And again, better deal than the rest of the world. We've got to work hard on the sectoral piece and we will get there.

Adam and I are part of the International Trade Committee, we are doing a review of CUSMA right now. And more or less, what we are hearing from stakeholders who coming and saying, find a way to preserve this. This is good for us.

But the second part is we shouldn't just put all our energy in just doing that. We need to explore the other world because the rest of the world is also feeling jilted by the Americans and now looking for new markets.

So there's a whole new imperative where in the past everybody wanted a deal with the Americans, now people are looking at everyone else. It's interesting how in this whole conversation, we have not talked about China and India, thus far because that whole dynamics have created a different imperative when it comes to China and India.

And look, Canada is going, being almost being pushed to go and engage with China and India and find opportunities, so that we have access to newer markets, growing markets there.

Rambod Behboodi:

China and India were, in fact, examples provided by Sergio Marchi at our last session. And in fact it's funny because just today I saw reports about Switzerland expanding its existing free trade arrangement with China. The arrangement they entered into in 2013. And they're expanding that, and of course that's coming three days after they presented the bar of gold and the gold Rolex in the White House.

So that raises a couple of questions. The first one – and we still don't know what the actual term, terms of the agreement are between the Switzerland and the US. That apparently, the text is going to come out in July 2026. That's the, that's what we're hearing. Who knows?
So the first question, to go back to the point you raised about the agreement. We have now texts from Thailand and Vietnam. Now, those are, of course, they're not quite in the same power relationship with, with the United States economically. But at the same time, they give a, they're the only agreements we have. They give us a sense of what is expected. And, we're going to be writing an article about that to explain them. There's not a whole lot of analysis, unfortunately, in the Canadian media about those agreements, just so that everyone has a better sense of what these agreements can look like.

But, they, for lack of a better term, they are very much capitulation agreements. They, for example, they require, the grant of concessions to the US on services trade, equal to anything that any of those countries enters into with an, with another country. A unilateral MFN concession. They freeze US tariffs, at the same time as they require those countries to drop whatever measures they have in terms of information security, data centers, and so on and so forth.

So again, very lopsided, in that way. And, they have annexes that commit, for example, the one in Malaysia, commits Malaysian multinational companies to purchasing X amount of US goods.

I'm just wondering – again, not that that is the final shape of, a, of that would be the final shape of a, Canadian Canada US agreement – we've seen that announcements have been made about investments by Japan and the US that Japan very quickly withdrew, that purchases by the EU that the EU very quickly said the Commission may or may not have made concessions, but when they went back they were told that's not feasible. We don't still, we still don't know what the Swiss commitments are in terms of either investment or purchases. But, but I'm just wondering, whether even those interests, and I hear those as well from my colleagues – well, the US is our biggest market, we should get an agreement. Fair enough. Even those interests who are pushing for an agreement, would they be willing to live with those kinds of commitments? That we know now they're in a text.

Adam Chambers:

I think you're asking a very good question.

I think it's a question that these individuals should be able to make with the full information. But we actually don't have much information about the discussion or transparency about the negotiations. For example, if there is a deal on the table, if it's a bad deal, and the reason why we still, we're nine months into this and we don't have one, is the reason, because in the government's view it is a bad deal? I think the fact that we're this long into the negotiations probably should be a little bit more transparency to let people know, or the market know, "Hey listen, there's a deal on table, but it's not very good. Here's what it looks like and here are the trade-offs that we're being asked to make, that we just don't think are, in the best interest of the country."

But the government's actually not saying that. The government's actually just not saying much of anything. We've had, some very good testimony at our trade committee from, from a number of individuals, but a couple stand out to me.

Mr. Steve Verheul, who's well known to you, I'm sure, and many folks here, or your listeners.

Rambod Behboodi:

We worked with Steve exactly 30 years ago on the Supply Management case.

Adam Chambers:

And so I think, one of his suggestions, which I think was, very reasonable for the government to consider is, look, we're into this for a fairly long time. We know we have NAFTA discussions coming up, or CUSMA discussions coming up. If we try to continue to separate sectoral tariffs in the NAFTA or CUSMA discussions, what could end up happening is Canada could be asked to continue to make concessions at multiple different junctures along the way, where, alternatively, if you said, look we have all these issues, we've got NAFTA come in, let's put all these things on the table we might be, make, fewer discussions at fewer concessions at the end of the day, by having one kind of broader discussion with America versus individual negotiations, each by sector, where Canada doesn't actually have many concessions to make, I think is part of the challenge.

And so that was an interesting alternative viewpoint, suggestion that I think could be made. But I think there's an issue around transparency. If we don't have a deal because the deal being offered isn't a good one, I think, now is probably the time to let people know what, the reasons for which. And I get, you know, you're negotiating. It's difficult, and you want it to be confidential. But I think we've also heard testimony says, we've, we know a lot less about this discussion than we have about other ones with other countries and or the Americans in the past.

Stephen de Boer:

I think the, oh, sorry. I was just going to say, I think the fact that, I'm reading tea leaves here, but the fact that Trump called Canada nasty suggests that Canada's not capitulating along the lines of Vietnam or Thailand. But you're right, we don't have a line of sight on that.

Yasir Naqvi:

And that's the point exactly I want, was going to make that, that these are very sensitive negotiations, and what we are learning are quite volatile as well at times. Small gestures, acts even by sub-level governments within Canada can put these negotiations in jeopardy.
So one has to be really mindful.

The other thing we also know is Prime Minister has been very clear in saying that a deal has to be good for the United States, but it has to be equally good for Canada. So we have a marker there in place that it has to, speak to the economic advantage for Canadians. We are not just going to sign an agreement for the sake of signing an agreement.

And the last thing I think, which is extremely important, is to maintain the CUSMA advantage. Which is, which we cannot ignore. 85 per cent of our goods that are being exported to the United States are tariff-free. And we should be thankful that all parties are following the Agreement with the exception of sub sectoral stuff. And so we have to preserve that as well and not throw that, because that will be even a huge economic disadvantage to us.

So I think these are the, this is the straight jacket we find ourselves. As we are trying to negotiate with limited set of concessions – I agree with Adam – to get to a place that, hopefully brings us as close to where we were, before these tariffs were starting to be imposed in Canada.

Stephen de Boer:

You raised India. So I would really be fascinated to hear your views as to whether we think this is a good idea to be pursuing, a free trade agreement or closer economic relations with India. The International Trade Minister has just come back. I understand that the Indian Trade Minister Goyal is coming here in the new year.

Is this the right approach?

Or have we, is there an argument to be made that we're ditching the values-based discussions that we used to have. I mean this is not that long ago that we had a pretty significant diplomatic spat with India, that hasn't quite been resolved as far as I can understand.
But are we comfortable across the aisle on pursuing closer economic ties with India?

Yasir Naqvi:

I think India and China both, there's a significant change in geostrategic realities. We have to take that into account. We cannot be pursuing trade diversification and not look at two of the largest, fastest growing economies in the world.

We, of course, have to be very mindful as to how do we perhaps compartmentalize our economic prosperity and growth versus other security-related issues. And I think that is the delicate balancing act we have to do as it relates to both India and China. And I think that's what the Prime Minister, when he's met with the Chinese President had, has articulated. Same thing, the conversations that Minister Anand has had with, with Indian counterparts and now Minister Sidhu's recent trip.

I say all this, in making sure that we are finding those right pathways. I think in the end of the day, Canadian values around respectful rule of law around human rights, that's an overarching umbrella that's always going to be there, and that's always going to shape our thinking and our negotiations.

But they cannot just be the only, only piece. We need to find, we need to find a way to balance those. And again, not an easy answer, but it's where we find ourselves to be. The reality is in this world right now, and we have to be, we have to be able to engage in that.

Stephen de Boer:

Do you agree with that, Adam?

Adam Chambers:

Look, I would, agree in the general sense that we ought to be thinking about all of our options.

As it relates to India and China, if I was to rank them, I think, I would say that a deepening or fixing a relationship with India is probably more of an objective than one for China at this instance. I know that obviously the agricultural sector and relationship with China is incredibly important.

I think we also have to just recognize that in the geopolitical world where the US sees its largest enemy as China. Or its largest threat. Maybe not full enemy, but a threat. And I think China recognizes that Canada's role is not necessarily at an equal playing field with where they view themselves as China and America, but that China views Canada as like this middle pawn that it is trying to use to disrupt China's primary nemesis. As in America.

So I think we have to be conscious that we may be being used as a tool to disrupt the military and economic supremacy of America to benefit China.

So I think, while it has some promise, I just think we have to be, aware of that potential. I don't see the same risk per se on the geopolitical level as, I do with India and China in terms of that. This, being caught in the middle of these two large global powers, being the US and China. I think India may represent an opportunity that doesn't come along with it, that other dynamic that we need to be mindful of.

Rambod Behboodi:

One last question and, only because Mr. Lutnick was on Fox News last week, quite animated, ripping into Canada for the enormous harm we're doing to the US movie industry.

A bit of disclosure, about 20-odd years ago, when I was at the Trade Law Bureau, still with the Government of Canada, the United States proposed to slap countervailing duties on Canadian film because of the subsidies we had. And so we went to, we went to Washington and I, you know, being, a subsidies wonk, I said, "So, what are you going to impose duties on? The film reels? The negatives? The value of the film? Or the intellectual value that's in the film?"

Anyway, the conversation was highly technical, really inconclusive, and at the end of the day, it, the Americans dropped it. Partly because, despite the fact that at the time Jack Valenti was frothing at the mouth against Canada, everyone realized that we all benefit that, for example, Battle Star Galactica was being filmed in Vancouver.

So now it's back in the news. And, it seems to, seems to have animated quite a lot of, quite a lot of, angst, shall we say, in Washington. So very quickly, should we just, cut off all subsidies to the film industry and make the Americans happy? The same way we got rid of the tax credits?

Yasir Naqvi:

Was the expression goes, "We've seen this movie before"?

Look, I, again, I'm really mindful that we just cannot get worked up about everything we hear on the other side. It's just volatile and we just have to keep calm and carry on, as the saying goes. We need to obviously focus on what our job is to protect our cultural industries.
Remember we had that whole thing too under NAFTA. I remember writing a, a piece, peer reviewed piece on the Periodical case.

Rambod Behboodi:

Absolutely.

Yasir Naqvi:

And what it meant and the pushback from the Americans as it relates, as it relates to that.

So these are challenges are not new in our relationship. We've dealt with them, but we've dealt with them because we've always talked to each other. That has been the strength of this relationship between Canada and US as two rational parties talking of course from their own self-interest perspective, but using the tools available to them in a rules-based context.

What worries me at a macro level is the protectionism we are seeing is just chucking away the rules-based system. The uncertainty that Adam was talking about, the businesses facing, is precisely that. The idea behind these trade agreements was not to have free trade, we never got free trade. It was liberalized trade. But most importantly, we, put rules around how we will engage in those trades because then businesses could plan and figure out a way to make a profit. We just find need to find a way to get back there, whether it's the cultural sector, in movies, or selling cars, to United States.

Adam Chambers:

There's two different components to the film or television industry. There's the actual, like, the making of the product itself. And then who owns the IP?

Well in many of these circumstances, guess who continues to own the IP. They're American large, multinational, global behemoths. And you can list them all here. We all know who they are, the streamers – the amount of money that's gone into production, is staggering. It's never been a better time to be a couch surfer, Netflix connoisseur, because you've, been able to watch pretty much anything you want. Unlimited. Most of that IP that's created actually ends up being owned by Americans. So I actually think it's just another example of, the Americans, in particular with Mr. Lutnick, using anything they can to justify a delay of the negotiations. And I think it's because the current status quo in kind of this situation we find ourselves not having a deal, actually benefits America more than it benefits Canada.

And you can connect it to the television ad by Premier Ford. Whether the ad was the right ad or the or not, or the right timing or not, I think maybe besides the point. I think it would've, if it wasn't the ad, it would've been something else that the Americans would've used to say, we don't want to talk because they know that the longer, that there is no deal, the more uncertainty there is there in the Canadian business community, the more likely it is that someone might grow a plant in the US. Which is why, again, you circle back to a desire to try to get things sorted out with the Americans in a more quick basis. As I said before, the election was fought on like actually getting a deal.

It would be great if we could sort that out. And if we can't get one, then I think we should be transparent with the public about what trade-offs we're making or what sectors we actually, are knowingly allowing to feel the brunt of not having a deal.

Rambod Behboodi:

Thank you. And that was – bringing back the IP issue was really good because it connected us with the opening segment, of this podcast.

This brings us, to the end of our session. Stephen and I would like to thank Yasir Naqvi and Adam Chambers for being with us.
Finally, a project of this kind requires a lot of work to bring together. In particular, honorable mention is reserved for Alex Zoutis, Articling Student, and our producer Jason Chute and of course, the entire technical staff of BLG.

Thanks.

Adam Chambers:

Thank you.

Yasir Naqvi:

Thank you.

Rambod Behboodi:

This is Rambod Behboodi, Senior Counsel at Borden Ladner Gervais in Ottawa. I'm here with Stephen de Boer former Canadian Ambassador to the World Trade Organization. And this is the Tariff Home Companion. A new podcast to shed light, not heat on trade and tariff issues affecting Canada and Canadians.

We're back to talk trade.

For the final episode of this season we're departing somewhat from the script.

The last five episodes revolved around the ongoing challenges of trade with the United States, or rather the single most important challenge - export dependence on the rich, but increasingly idiosyncratic US market. We began with the Canada-US-Mexico agreement, zoomed out to the global trade framework, and then concentrated, in the last three episodes on the promise and pitfalls of diversification.

A couple of developments last week, however, reminded us that all is not doom and gloom. That trade is more than just tariffs and TRQs. That the CUSMA, still our most valuable "deal" with the United States, is about more than just steel and aluminum and rules of origin and supply management.

What were those developments?

Three cases brought by the United States against Mexico.

Not ordinary trade cases, mind. These are cases about labour rights. To discuss these cases we have with us two experts on labour law, trade, and forced labour. But first and as usual, a bit of background.

What does labour have to do with trade?

Well, almost everything. And also next to nothing. 

Let me explain.

Since the early days of free trade theory, going back to the publication of Adam Smith's The Wealth of Nations in 1776, so 250 years this year. It's been understood that labour, its availability or expertise or both, is a key determinant of both national wealth and trade.

If you don't have enough workers, for example, you can't produce goods that are labour intensive. In the same vein, if your workers are not properly trained or educated, you can't produce high-end stuff. And if you can't produce them, you can't sell them, or trade them. Easy enough to see the almost everything connection.

What about next to nothing?

That's a bit trickier. And it's institutional. As Stephen will point out, for the most part, global trade agreements have avoided tackling labour issues. Part of the reason for that is what we just discussed. Labour is an element of the competitive advantage of nations in their trading relations.

Sometimes the most important element.

Think textiles and Bangladesh. So if you go and say, textile workers in Bangladesh should get paid the same as those in Canada because otherwise it would be unfair exploitation and so on and so forth, well, that just won't work. Any attempt at equalizing pay or higher end labour rights could be seen, and I think rightly so, as a means by developed nations to flatten the advantage that developing countries have in producing goods, and increasingly services.

That's why developing countries have successfully kept labour issues out of multilateral trade agreements.

More on trade on labour later. But first, a bit of background.

And there are three points I'd like to touch upon.

The first is a historical curiosity.

Canada's longest serving Prime Minister, William Lyon McKenzie King, was also Canada's first Deputy Minister of Labour. About a decade before his first election to parliament. A decade after that, he published, Industry and Humanity, in which he discussed industrial reconstruction after labour crises. Three years later, he was Prime Minister.

I'm not drawing any conclusions, of course, about the centrality of his role as a former deputy minister or Deputy Minister of Labour, or his book, to his future electoral success, but an interesting factoid nonetheless.

The second is that one of the most significant cases in Canadian constitutional history relates to the international regulation of labour.

In the dying days of the Bennett government, which ran from 1930 to 1935, Parliament enacted three pieces of legislation to regulate weekly rest, minimum wages and hours of work nationally.

Naturally, the province's objected.

There was a reference. The Labour Conventions case was definitively decided in London in 1937, with King back in office in its third mandate.

The case is significant because it marks a major constitutional departure point between the two federal Dominions: Australia and Canada.

The Judicial Committee of the Privy Council, Canada's highest court back then, found that although the Federal Crown was responsible for negotiating and ratifying treaties, domestic implementation was a different matter. Authority to implement ran along the established division of powers in the Constitution Act.

And so if the subject matter of a treaty failed within provincial authority, as labour conventions clearly did, Parliament was out of luck.
Keep that in mind. It's more than a factoid.

Finally, the international dimension.

The conventions at the heart of the reference were entered into under the auspices of the International Labour Organization or the ILO. More fascinating fact was factoids on that later as well.

The ILO was one of the multilateral organizations along with, for example, the League of Nations, that were established under the Versailles Treaty. Remember, the treaty was the culmination of the War to end War. The object of the treaty was to establish universal peace and the treaty goes on, peace can exist only if it is based on social justice, and social justice requires the improvement of the conditions of labour throughout the world. Hence the ILO.

Those were simpler times.

As an international organization the ILO is unique in that it is a tripartite entity. Like all international organizations, it has member states that negotiate and then, one hopes, implement treaties. But - and this is crucial - it also has as members, employer, organizations, and unions. The idea was and remains that global framework agreements on labour conditions are to be worked out by talking to, and directly engaging, directly affected interests.

So now the Great War has ended, a peace treaty is signed, international organizations have been established, and one of them deals with global labour standards.

In its early sessions, the ILO tackled a whole bunch of draft conventions. That was in 1919.
King, the former Deputy Minister of labour and the author of a book on labour relations, becomes Prime Minister in 1921. And of course, he immediately proceeds to ratify and adopt and implement the labour conventions.

No, he didn't.

Looking back to the first curious thing, although the former deputy minister of labour remains Prime Minister, except for a few months through 1930, there's no action on the conventions.

R.B. Bennett, the new conservative Prime Minister gets to ratification and implementation only late in his term. Of note, and this too I find a bit curious, Bennett gets the conventions approved by both the Senate and the House before the implementing legislation is enacted. It all gets a bit more confusing because there had already been a reference to the Supreme Court of Canada about the conventions, and the federal government had lost. That was all back in 1925. Now, 10 years later, Parliament acts, and enacts. And the government refers the matter to the Judicial Committee.

Where were we? Oh yes.

In our reverse time machine reference, labour conventions, the ILO, the Treaty of Versailles, and the war to end war. Except of course it didn't.
Now, fasten your seat belts because after the reference we are fast forwarding back to 1948. We've been there before.

At the end of the Second World War, again to end all war, the victorious allies established even more international organizations and entered into more solemn agreements, and negotiated and ratified more and more ambitious conventions.

We've already talked about the World Bank and the IMF and the GATT.

Starting in 1948, you also have the Freedom of Association and Protection of the Right to Organize Convention, The Universal Declaration of Human Rights, and other conventions dealing with collective bargaining, equal remuneration, minimum wage discrimination, and so on.
Right there you can see the trend. A separation between the world of trade and that of labour rights.

Nothing about that was accidental.

Stephen de Boer:

Now that we've caught up on the history of labour rights and the pre-NAFTA framework, let's talk about the commitments Canada, the US, and Mexico made on labour under NAFTA and its successor CUSMA.

But first, I want to take a few minutes to talk about the WTO and its connection, or lack thereof, to labour issues.

Here's an interesting factoid.

The WTO is housed in the former building of the International Labour Organization, and for a while, the ILO and the GATT shared the premises. There are a lot of art deco murals representing labour, in fact, in the building. They were plastered over when the ILO left and the GATT took over the entire building. And they were accidentally discovered decades later, and then intentionally unplastered and restored.

The irony of the whole thing is that neither the GATT nor the WTO since 1995 addresses labour issues.

This is not an accident.

The issue of whether the WTO should have anything to do with labour has been debated since its inception. It was raised at the 1994 Ministerial Conference in Marrakesh, where the treaty that formed the WTO was signed. And then at the very next ministerial conference in Singapore in 1996. That's when Members decided that although the WTO affirms its support for the ILO's promotion of labour standards, it is the ILO and not the WTO that sets and deals with them.

Labour is only mentioned tangentially in the WTO texts. The preamble of the Marrakesh Agreement provides for trade with the view to raising standards of living and ensuring full employment. Article XX(e) of the GATT 1994, allows WTO members to adopt otherwise discriminatory or trade restrictive measures if they relate to the products of prison labour.

Members can also try to argue that discriminatory or trade restrictive labour related measures are necessary to protect public morals under Article XX(a). Or that they are necessary to protect human life or health, under Article XX(b). But likely without much success.

So really what you can see is that the WTO is not doing much on labour.

In the NAFTA context, it's interesting that labour rights under the NAFTA regime were not actually in the NAFTA text itself. They were negotiated and agreed after a change in the US administration and insistence by the Democratic majority in Congress, on provisions relating to labour and the environment.

The North American agreement on labour cooperation, or the Labour Side Agreement, or the NAALC, listed 11 core labour rights that the parties had to promote but not necessarily establish common minimum standards in their domestic labour laws. Among which were the freedom of association, protection of the rights to organize and related rights, protection for children and young persons, equal pay for women and men, and prevention of occupational injuries and illnesses.

And so the three parties agreed to promote compliance with and effectively enforce their domestic labour laws through ensuring workers had access to administrative, quasi-judicial, judicial, or labour tribunals to enforce rights under domestic labour laws and collective agreements. And ensure that these courts and tribunals proceedings were fair, equitable, and transparent.

The Labour Side Agreement also set up the Commission for Labour Cooperation between the three countries. The Commission was there to promote cooperative activities between them on things like occupational health and safety, child labour, employment standards, and compensation for work-related injuries.

Each country was responsible for enforcing their own domestic labour laws through their own domestic bodies, but each also had to set up a national administrative office to handle complaints against another NAFTA country. And then there were a series of complex procedures to address those complaints.

The many steps to get to this point, and the long timelines between each step, meant that it would take quite a while before any action was taken to enforce the labour obligations under the NAALC.

This process was also limited to addressing complaints on a limited number of issues. So, despite the many complaints made under this procedure, no trade sanctions or penalties were ever imposed under the NAALC.

Where the spirit of the NAALC was cooperative and aspirational, CUSMA is much more explicit in defining labour obligations and how they can be addressed.

Each country's obligations with respect to labour rights have their own chapter. Chapter 23. In the main text of the agreement, under CUSMA, Canada, the US and Mexico committed to have laws and regulations in place on key labour issues.

They agreed to not weaken or waive labour laws to encourage trade of investment and to address violence or threats of violence against workers exercising, or trying to exercise their rights. There are also specific obligations on worker representation in collective bargaining in Mexico.

CUSMA has something the Labour Side Agreement did not. The facility specific rapid response labour mechanism or the RRM. Remedies can range from suspending preferential tariff treatment on goods from that specific facility to denying those goods entry outright. Disputing parties can also negotiate a remediation plan too, for example, provide back pay to workers or reinstate them.

So far, the US has used this rapid response mechanism to ask Mexico to review more than 40 facilities for denial of rights. Canada has only used it once.

Although limited to the denial of specific rights, the RRM seems to work better and faster to get some remedy or compensation to workers.

Twenty-nine of the US's forty-two requests have been resolved and all except one resulted in some remedy to workers.

Rambod Behboodi:

Globally, labour concerns are taking more ambitious paths, in means and mechanisms as well as objectives.

In addition to the tripartite framework of the ILO, we have a host of non-state actors, NGOs, engaged in advancing labour rights.

For two years, I was privileged to work with NGOs on a range of labour rights projects in the textiles and garment sector. Some of the research has been published and is easily accessible.

The issues are complex and the solutions are not evident. But work continues.

Unions and employers at the production stage, or rather stages, buyer and the buyers and retailers and brands, consumers, NGOs, development agencies, international organizations, and of course states - all participate in this engagement.

There are due diligence laws, for example, those in France, Germany, and the Netherlands, that try to protect children and provide more stability for workers.

There are laws, for example, in Canada, Australia, and the UK, trying to tackle forced labour, child labour, and modern slavery. And more continues apace internationally, even if with diminishing returns.

The two that I've worked with in the last five years are the OECD Guidelines for Multilateral Enterprises on Responsible Business Conduct, and the draft convention on business and human rights.

Now, we've thrown a lot of information at you.

We're joined today by two of my colleagues at Borden Ladner Gervais. 

Benedict Wray is qualified in, England, Wales, and Ontario. We work very closely together on trade and sanctions issues.

He also represents clients under Canada's modern slavery legislation.

Kate Agyemang is one of my colleagues on the Labour and Employment side of the practice at BLG's Ottawa office.

In her bilingual practice, she helps Canadian and international businesses to effectively navigate and manage workplace labour and employment issues in a responsive and pragmatic way.

Kate, Benedict, thanks for joining us today.

Kate Agyemang:

Our pleasure. Thanks for having us. 

Rambod Behboodi:

We always start with a softball question to put you both at ease.

Kate Agyemang:

Alright. 

Rambod Behboodi:

So we're not going to break tradition just because we're colleagues.

Looking at the landscape, it seems that there are, broadly speaking, very broadly speaking, three types of approaches to addressing labour rights globally.

One is the multilateral path through conventions agreed at the ILO, that attempt at least to establish some form of a standardized minimum threshold or minimum protection globally.

The second one is the approach we've seen developed in the NAFTA. Which is the domestic enforcement angle. So requirement to have certain laws. And then, action is not taken in respect of the conformity of those laws to any international standard but rather on whether or not the laws that you have are, are being, enforced.

And the third, which is the work I'm doing, or that I have been doing on textiles and garments, is the due diligence framework. Which is basically shifting the responsibility for worker rights protection to consumers. In an indirect way, through the medium of the brands, by essentially requiring that brands, for example, actually pay what they're supposed to pay. That there is, if there's going to be a shift in, in supply chains, there's, some adequate notice given and so on and so forth. There's a whole bunch of, substantive requirements. But these are, essentially framework legislation at the national level that then leave the details to be worked out between brands, buyers, and retailers, and the producers on the spot.

Which of these do you think is, the most effective?

Kate Agyemang:

I would have to turn that over to Benedict for the first one on this.

We've been working quite a lot on some of the modern slavery due diligence queries, questionnaires, frameworks on this, and it really is going to depend - it's not the trite lawyer answer - on the particular organization that we're dealing with.

Benedict Wray:

Yes, I think they all have their place, Rambod.

The reality is that sort of one of those things by themselves is going to be difficult for it to be effective without the others involved as well. I think we have, I think in this space, it's a complex space; there are no easy kind of silver bullet solutions to how do we solve the forced labour problem in supply chains, or how do we solve the forced labour problem globally.

And so, each of those different elements of regulational governance has a place in, combating the problem. At the multilateral level of trade agreements and kind of multilateral, non-state actor agreements as well, those are important because, for example, take the cocoa supply chain, where you've got, historically, you had large levels of untransparency all the way down, to the extraction of the materials.

It took, kind of a concerted effort, by various stakeholders in pulling together multilateral frameworks that they could work with, but that was also driven by the other elements you've been talking about.

It was driven by the fact that people had to report under reporting legislation. It was driven by the fact that there was, there were obligations on states to enforce their legislation around labour rights.

So it all kind of operates together in my view, and it's difficult to kind of see how we would remove one of those elements from the equation and still have, still be working towards, kind of a better degree of regulation enforcement in this area.

Stephen de Boer:

Can I ask a definitional question just for the benefit of our listeners?

What exactly do we mean when we talk about modern slavery?

What is the situation that we are attempting to discipline?

Benedict Wray:

That's a great question. The ILO defines it as a kind of umbrella term.

It includes things such as forced labour. It includes elements of child labour. It also includes sex trafficking and forced marriage.

So when we are working in the sort of forced labour space, we tend to exclude the sex trafficking and forced marriage things from consideration a lot of the time, although not exclusively, because obviously some, when it comes to sex trafficking, there's also forced labour and sex work and that can be a very, kind of, important and sort of difficult area to delve into.

But it is also important not to lose sight of the fact that, modern slavery embraces more than that. And the sort of global regulation that combats human trafficking and forced labour also is aimed at combating the other elements of modern slavery.

Rambod Behboodi:

Well I mean, that, I think leads to the next question, also a softball question.

How forced does forced labour have to be to go from, sort of really oppressive, but not forced labour, but forced labour? 

Kate Agyemang:

Again, it's going to depend on what lens that you're going to be in. And one of the reasons you'll hear "depends" as a consistent lawyer or trite joke, but absolutely applicable in this space is because labour and employment is not simplistic.

It is impacted by, as you said, everything in trade and also not related to trade in the same way, in a bizarre element. So when we're talking about forced, forced in one individual's context or one sector's context will look very different than it would in perhaps a different one. And so, when we're looking at these things, what the multilateral agreements can do on an international stage is talk about the parameters of that discussion, about what's included, or trying to be included in a broader understanding because these definitional terms are so foundational to these discussions.

What we also see though, is that, that starts to shape the local discussions about what forced labour means. It starts to change cultural norms and cultural discussions about what forced labour means. And again, whether you may have, is it forced labour they're freely entering and coming? Or is it really forced because they're not freely coming?

The reality is their day, is they were required to be here in this position, in this vulnerability to an oppressive employer, to eat, to survive that day.

So I think that's the challenge when you're dealing with what is forced, is exactly why these are not simplistic solutions. It's very easy to come from a high level space and say it should be clear cut.

And I think really actually appreciating and understanding what people are facing day in and day out with forced labour, it is very complicated. It is impacted by trade. It is impacted by uncertainty, poverty, privilege. And these are not, separated out items. And when you get into all of the discrimination around it, you get into, whether that's financial, systemic, or gender or racial, each and every aspect of this as these trends of discrimination change, which, you know, they do as things come in and come out of what is now considered acceptable, or not acceptable, cultures have to shift with that. Workplace cultures have to shift with that. Labour culture has to shift with that. And who employers want or want to be seen to be will shift with that.

So I think, that it's always the trite joke that lawyers always say, "it depends." And in labour and employment, it's not only the joke, it is definitive. It has to depend if you're actually appreciating the complexity that people are facing, particularly in an increasingly globalized market.

Benedict Wray:

Yeah, I mean, I don't really have a whole lot to add.

I mean, the international definitions look very simple on their face.

The ILO definition for forced labour is, labour that's under some threat or coercion. But then, exactly as Kate just explained, then you have to explore what's, what does coercion mean?

And that the answer to that is exceedingly complicated. Right?

So we have, and the ILO has a list of red flags or common markers of situations of exploitations that may point to someone being, for example, debt bondage, or that threats have been made against them or their family. But then as the list goes on, it becomes more and more complex as you delve into the situations.

It's the same with child labour, right? I mean, it's easy to sort of say, okay, we have a bright line rule, in the international conventions that we can, we're going to pick the age of 15. But then how does that work culturally in specific jurisdictions?

And also, what about apprenticeships? What about training programs? How do those fit into what is and is not, child labour or underage labour?

And so those situations can quickly become complicated.

Stephen de Boer:

So where, what are the international trends right now?

Where are these, where are labour discussions heading?

Is there a sense that there's some backsliding or are there new interesting concepts and ideas that are being discussed at the international level? 

Kate Agyemang:

I think from my lens, you know, as someone who advises both local, national, international entities from, you know, NGOs and nonprofits, to big massive global conglomerates, there are some trends that we see in this, and it's both.

There is some backsliding globally on terms of what rights mean, what rights are being advocated for or rescinded in different areas. There's also new ideas that are coming in response to that and that pendulum swing we see in history as you so beautifully summarized, which is a complex way to summarize at the beginning. When you see these pendulum swings of rights, they're usually right after a period of oppression of where rights have been removed and that became a topical focus and a lens that people are paying attention to.

There seems to be a general sense, overtly here that the pendulum, that people were taking rights a little bit for granted and that now you're going to need to advocate for things that you might once have thought were just table stakes.

And in that, you're seeing both. You're seeing backsliding of people who are saying, "maybe I resent those table stakes and I don't want them there because".

In response to that, and the part that brings me hope, is there's a whole group of people going, we can't go back. We need to go forward and figure out how do we deal with this situation and increase and enhance rights in a way that's pragmatic and realistic and sustainable, not withstanding backsliding. And I think that, that trend is what you're seeing is causing a lot of economic uncertainty, but a lot of personal uncertainty on decision making boards and C-suites on everyday average workers.

People feel that tension. Post pandemic people came back less recovered, less resilient, if you want to call it, because the resilience or coping skills have been taken. And when we're having these big, complicated, very personal, entrenched view discussions, the resilience level in that, is people are needing time to address that level of uncertainty in trade is causing a level of uncertainty in what they're planning for their workforces. What they're planning for their day-to-day. What they're planning for in terms of what they want to advocate for. How their brand placement wants to be placed on a globalized market. And I think it's exactly that.

There is a question happening at board tables of small and large, of who do we want to be in this current time? And some are deciding they want to be leaders in the way of saying, "Nope, we are going to set what our due diligence will look like, in what our investment thesis is going to be, and who we are as a corporation, and bigger than that within our communities, both locally and abroad".

Others are saying we're going to take advantage of some of these spaces to see if we can change our operations and figure out how we can use this to our advantage to set us out further. And depending on the organization, both of those can be rights advocating. Both of those can be backsliding.

It very much depends on who and how that leadership is structuring what they see in this economy.

Benedict Wray:

I think the intersection with trade here is really interesting, because it, again, it just kind of illustrates that ambivalence that there is at the international level right now.

I think it's important to note that the forced labour ban in CUSMA, the forced labour import ban that came from CUSMA, I mean CUSMA was negotiated in the first Trump Administration. The fact that it's in there, I think follows a kind of quite clear evolution of how the US has been addressing this, both on the trade front and on the domestic front, over the last decade and a half. And I don't know, I don't believe that those types of considerations are going away.

There's a clear trade agenda to approach certain geographical areas through import bans that include forced labour bans. And, there's, I would, the other thing I would sort of, the other thread I would draw there is the prison labour ban, which I find fascinating and I'm glad, you mentioned it in your historical summary. But Canada's prison labour ban goes back to 1987, and it was never justified on a human rights or sort of labour rights basis to start with.

It was essentially an anti-dumping provision. Countries were concerned that forced labour in prisons would produce goods at an undervalue, and they would then be able to flood the market of other countries with those cheap goods, thereby threatening domestic producers. And there's early case law on this to do with twine in Canada, the sale of twine produced in prisons.

But so it's, you know, and then in the late 20th century, the pendulum swung and we found, we also found additional ways to justify the forced labour ban as through human rights and so on, and so forth. But it's interesting to me that there's also that trade advantage, that competitive advantage justification for forced labour controls in trade agreements. And I think we may start to see that coming to the fore now a little bit more as we've seen some of, sort of some of the backsliding on human rights and labour rights discussions internationally.

The other thing I think that is interesting and coming down to the micro level, is reporting legislation certainly doesn't look like it's going away.

So I advise clients regularly on reporting under Canada's Supply Chains Act, fighting, forced labour, Fighting Against Forced Labour and Child Labour and Supply Chains Act. The Modern Slavery Acts in Britain and Australia, which it's modeled on, they've been around now for a decade or half a decade. There isn't any indication that any of them are being taken off the books. And the effect of all of that is, that people need to keep, they have an obligation to keep looking into their supply chains. And they've got a, it increases the risk that, risks will, a light will be shone on risky situations, and that may then become violations. And those will hit the media or hit the public eye in a very direct way that will be enormously damaging for anyone buying for anyone who has a complex and global supply chain.

So the focus I think is shifting from, at least here in Canada, from how do we comply with the baseline reporting requirements of the act that's in place? To, how can we make sure we have an effective early warning system that will tell us - where the risks are, and where the riskiest areas of risk are - so that we can focus our efforts on those. In order that we don't have a terrible situation that comes to light or that develops within our supply chain, or within our globalized, or global organization, that we are then going to have to report on.

Stephen de Boer:

I find this observation that this is less about human rights and more about competitiveness to be rather compelling. Because it certainly seems like this is what was going on in the NAFTA and the CUSMA negotiations as well. You can dress it up any way you want, but really it's about, the economics of all of this.

But it seems to me, and given what you've been saying Kate about what's happening in C-suites and what boards of directors are thinking about. It strikes me, and I'm wondering whether you agree, if both of you, would agree with this, but the most effective enforcement mechanism seems to be reputation and reputational risk. And also the necessity of having an informed consumer. Because if a consumer doesn't care, or is not informed as to what is going on, then why would this matter necessarily?

Do you agree? 

Kate Agyemang:

I think you've hit the nail on the head in terms of transparency is an increasingly a double-edged sword in a technically connected and informed consumer market. People aren't going into stores to have things fed to them. They're buying online. They're searching online. They're looking at reviews online.

There's a consistent thread of knowing who your brands are. You see the generation Xers, who are coming in and very cognizant of what brands they want to put their money toward, or not. Now to more or less degree on individuals. But there is a culture of some of the largest brand buying demographics are paying attention to, are you someone that I want to be proud wearing your name or not?

And whether that's consumerism or trite will depend on the person, absolutely. But again it's exactly that. It's being top of mind. They want to be transparent and they don't want to be the ones who are outed of as being inappropriate, offside, or in these things. And that is a large concern.

There's also this shift because of this, the change in how, frankly, North America is being seen internationally, maybe no longer as a leader, as there's more backsliding happening, but as an agent of change, and where do you want to be on that agent of change structure, as how North America is being considered is changing. And the public perception in Canada being so close to our American friends is directly impacted by that.

And so when we have these international components, what you're starting to see is this reporting right, and that it will be available, it will be readily, easily accessible. And while the reporting people say, "ah, who's looking at the specific report from something, six links down on a government page". It's bigger than that. It does become newsworthy. It is something that publicists, marketing groups, are taking it and planning on of we need to make sure that this is something for our economic bottom line that we're part of.

And I think greater than that, we've dealt as businesses, with lots and lots of rounds of economic uncertainty. But this one feels different for people. It, pandemic closures and all of this, there was just global uncertainty and it didn't strike the same kind of identity crisis maybe as some did at the time, as people trying to come together to deal with a global illness, a global threat. And everyone was kind of doing what they could to support those who are out dealing with the most frontline threats.

This feels different. This is, there is a threat there and what that threat is for each individual business is coded in different language, is brought different things. But how people handle uncertainty and the psychology of that, is handling in the boardrooms effectively every day.

Are we using this to make this point to be increasing profits, increased texts Do we have the ability to invest now, so we're better out off on that next side? Are we needing to really reduce our workforce to handle the uncertainty that's coming down from funders, donors, investors, this kind of space?

What I find fascinating, consistently is the psychological process of how uncertainty is channeled in a business. That is an international phenomenon happening right now in real time. People are deciding what uncertainty means for them. Is it an opportunity? Is it a mirror coming up of things we should have been doing already?

And that level of resilience and psychological leadership that happens in that, impacts everything from workplace morale, to brand marketing plans, to how seriously I take my compliance issues now that there's reporting coming out. And it that the psychology of work is so impacted by trade, and that it plays out at all levels. I think we're seeing that on every size organization I deal with.

Benedict Wray:

I think what I would add is, consumer pressure is important, but I see two kind of exceptions to that.

The first is investors.

Where with the advent of reporting transparency regimes like Canada's, like France, like the ones we've kind of covered, there's, it increases the assessment of risk by investors to include labour rights and human rights as part of investment risk essentially. And so, you do tend to see heightened attention given to these things by particularly large scale institutions, institutional investors, private and pension funds, financial institutions, and increasingly now private equity as well.

In Canada, that's in part driven because many of those people have to report themselves because to the extent they take a controlling interest in a company in their portfolio that is also a company that has to report and meet transparency obligations, well now they owe their own report on behalf of that company as well. But it's not exclusively driven by that. It is also just driven by the fact that once this information starts getting out to the public sphere, it becomes a kind of relevant and material financial risk as part of making the investment.

The second exception, I think is the pure trade one.

Kind of the rise of bans on importing goods produced with forced labour, and in Canada's case child labour as well. I think the calculus is different there. What's interesting is the methodology is the same, but the calculus is different because it doesn't matter now whether you're in a customer facing industry. If you're importing t-shirts or garments, and you are a retail facing organization, sure you have, that risk exists. But it's the same if you are manufacturing some obscure widget, that you only sell to other obscure manufacturers of something else. Now if there's a risk that that widget has a component in it that was produced or mined with forced labour somewhere in the world, there's a risk that that could maybe seize entering the country. If that happens it's no longer a reputational risk that you are facing. I mean, longer term it is, but your short term risk is you can't sell the product. You can't enter the market. You can't fulfill your orders to your customer. You may even go bankrupt if it's a big enough seizure.

And I think we've seen that logic play out in large scale south of the border with trade seizures under CATSA, and under the weaker Forced Labour Prevention Act, which number them into the tens of thousands.

We are beginning to see it here as well. We haven't had large scale enforcement by CBSA. We are beginning to see enforcement on the forced labour front. We've we have more than 50 shipments detained in the last couple of years by CBSA relating to this. The general consensus among the trade bar is that CBSA appears to be, sort of, experimenting with different approaches to see what works.

And so, that they can kind of solidify their approach to enforcement on forced labour grounds. But again, the point here is not how the enforcement is taking place, but just the overall risk that it will, and that you may have a large shipment seized and what that means when you can no longer access the market.

Rambod Behboodi:

I was looking for the full context of the Churchillian quote that gave rise to one of my favorite phrases - terminological inexactitude. But the full context is that, there were allegations of slavery in India, and he got up and said, in the opinion of his Majesty's government, contracts freely entered into by people cannot be defined as slavery without some risk of terminological inexactitude. Which goes back to the complexity of the situation that you set out so well Kate.

You also mentioned consumer information. And that brought back the fights we all had in the late nineties about labeling. And issues that seemed so completely overwhelming at the time have now just vanished. But if you remember, well you are probably too young to remember, both of you.

Kate Agyemang:

I love your lies. That's so sweet.

Rambod Behboodi:

But, the RugMark was one of those big innovations. It came. It's vanished largely. It was meant to tackle the use of child labour in rug making. And it largely vanished because, for all the hullabaloo about it, for all the advertising that was done around it, for all the government action that was driving it, the market impact was next to nothing. Two per cent. That was the market impact of the RugMark. After years of controversy and publicization.

So I'll leave that with you. Whether and to what extent consumer information is helpful.

Another thing that we looked at when we were in the context of the work that I was doing with the textiles and garments sector, was that a lot of the challenges for workers on the ground have to do with challenges between brands and retailers and the producers. So it's not so much that the producers are hell bent on exploitation. Maybe they are, maybe they aren't. But that the context within which they were working, and they operate, is challenging.

And the best example of that was during COVID, when one of the big retailers had a massive shipment to arrive from Cambodia. And they decided that there were no, there was no market for it. They wanted to ship it back. So they basically canceled the contract, as they were permitted under the contract. While the goods had arrived, and because it was not possible for the ship to go back, the ship was staying at port for six weeks. And all of the costs related to that were charged back to the producer. And this is all commercial contracts.

So we were exploring the idea of model contractual provisions that would be enacted into these contracts. The idea was not so much to enrich the producers, but at least give the producers enough money so they could pay their workers, which is really the challenge.

So I'm going to throw that out, for comments. Number one, do you think that sort of a consumer oriented labeling, a reviving that sort of consumer oriented labeling is going to be helpful?

And second, should we be thinking about actually going in and legislating key contractual provisions?

Kate Agyemang:

Well, you're asking a labour and employment lawyer, so I'm going to love a floor of rights on paper. I am always here for a floor of rights on paper. So that you can always do more than that, but that there is a floor that is legislated and required. Because people are not benevolent, unfortunately, en mass. They may individually be so, but that's not how it works. Even the most well-meaning employer in that they need to know what are the parameters of which to work. And so having a floor of rights is necessary often to start from a place where we can even have conversations about enhancement, advocacy and increasing. But there needs to be an understood and commercially viable floor. And that's again, a difficult thing to put in on an international stage. Particularly just how the laws works and our constitutions are set up in Canada, employment is absolutely going to be provincial unless you're a federal entity. So you can say everything you like on the international stage, and we'll have to deal with whether we can enact it. It's a different space.

But I want to go back to your point about consumer information. I think the concept of consumer information and labeling was too small. That's why it didn't work.

I think information has gotten broader than that. It's not the consumer to Benedict's point, who's not the only person who's looking at it. Yes, there's our influencers are the heavy hitters in marketing now. But we're also talking about your investors, the people writing the grants, the people actually creating the legislation about what funding is available.

The other competitive markets are looking to how you are perceived and how your, how they can use your reputational risks to their advantage. I think information and reporting structure in that, has to be bigger than an individual consumer and a label on a rug. It doesn't work. It's a great political policy statement, but it's not necessarily going to get you effective change.

And I think it's that.

It's understanding that it's not a simplistic silver bullet. You have to be able to have a multilateral approach to these things to address all the complexities, and even that, there isn't going to be a one size fits all approach. Is a floor of rights necessary, so we can have a conversation from a basis? Yes. Even putting that in as we're seeing with all our lovely history of international agreements. We're still trying to get people to have basic livable wages, even in a discussion, because we can only talk about historical minimum wages that are absolutely understood to not be livable. And that's still considered to be well above global standards in other places.

And so when you're going into these discussions, I think it's exactly that, to really have a conversation about labour and what it means to be forced, what it means to be advocating, what it means to be trying to do the transparent best in those spaces. It's people are watching and they're more informed now.

It's much easier to tank your reputation than it is to establish a good one. And that's true across industries. But people are talking about it more. And so it's not just the consumer information that matters, it is that overarching, you know, managing your company's brand for competitive advantage, for table stakes that are defined in a way that are putting you in a position of leverage and power. But also understanding that you have risk there and that people are more interested in that risk. Now, maybe not for the right reasons, but they're interested.

And when we have interest there, whether it's competitive advantage or not, if it is going to bottom line help the most vulnerable sectors of workers, great. I am here for that support and how we get to it in a way that's realistic has to be more than having the, you know, annual or every three decades drive for labels. It has to be something more intentional and consistent and is difficult, that is looking at the complexity of the issue.

Of what happens in a model agreement. Can we put in, "but as long as you pay your workers", can we put in these things and, thinking outside of the box, and not just getting kind of that decision making freeze because of backslides and or what we can't do, but what can we try to start implementing.

That is the cultural change that starts to happen in these discussions where it makes it awkward to not be at that table, even having the discussion because other competitors are.

Stephen de Boer:

I think the one thing that certainly strikes me is when we talk about risk, so much of this is not necessarily intended or anticipated. So if you think about the big fire in the garment factory and the link back to a Canadian firm, that really, really got Canadian consumers very, very interested. It was seen as a direct challenge as to what Canadians thought they were buying, or how Canadians viewed themselves.

And I'm not sure that the firms involved necessarily would've anticipated that happening. But a big fire occurred. The story came out for reasons that I found rather surprising. The CBC took a real interest in that story and it didn't go away. And they followed up. A year later, two years later, they followed up.

So from a corporate perspective, it seems to me, they need to start, they need to be thinking about those risks because they don't necessarily anticipate them and they don't necessarily know what the consumer reaction is going to be. So to your rug example, sure, maybe that didn't work out. But had there been a story, had there been a fire, had there been something that would've come to the attention of Canadians, that may have changed the dynamics.

And I think that's a risk that companies are really having to grapple with and be concerned about. And you had talked about that earlier, Kate, but certainly that example of the fire of the garment factory really I think, resonated here in Canada.

Benedict Wray:

Yeah I would just kind of add to that.

I think that's right and that's why, I mean, when I've sort of referenced the need to have an early warning system in place so that you can, you are informed of risks internally so that you can anticipate, so that you can anticipate and manage that those reputational losses is key.

And if you're not doing that, the risk you're running is exactly when you just kind of explained Stephen.

I mean I think my take on all of this is certification, sort of consumer labeling certification schemes certainly have that place, and I think we can still point to areas where they're relevant today.

Seafood labeling is probably a good example of one. And kind of sustainability labeling is another. But again, it's those, the consumer aspect of this only tends to be relevant, I think, in those sectors where there's a high degree of consumer expectation around sustainability or around social issues or fair trade or organic farming, et cetera.

But the methodology behind those certification schemes is much more relevant. And what I mean by that is the way that most of those schemes work was to develop some form of basic traceability down the supply chain for that particular product. And traceability is what everyone is now grappling with across the board.

Because that's the whole challenge of how do we get, you know, if we're worried that we, our goods may get stopped at the border, either because we're, that we're in the, a category of goods that is targeted for enforcement, or we just know that there's a likelihood that that's the thing, or we just, or we're very risk averse and we don't want to take the risk. We've got to establish traceability down to the raw materials or close to it.

And so, those types of certification kind of processes and protocols are in increasingly being retooled in today's world to on a sort of business to business model. That those, there are providers out there who will go and look at your supply chain and establish a chain of custody for things on your behalf.

There's a lot of technical solutions that are being used. People like to throw blockchain around, and talk about kind of blockchain based systems.

I mean, none of these systems are infallible. There's always room for human error. because, but certainly the methodologies that were developed for the consumer labeling are now increasingly being used and made some more sophisticated, as a way of informing businesses, about their supply chains, internally.

The other thing that was mentioned by Rambod was model clauses.

There, I think there's a lot of scope. And there's a lot of discussion around model clauses right now, both here in North America and across the pond in the EU. There's expo groups set up who are developing model clauses, both under the European sustainability and CS Triple D and here in North America under the ABA.

Those are, I think, critical to this discussion because the problem that you face as a buyer organization is if a problem arises, your options are binary. In the absence of any developed contractual framework. You can terminate your supplier. Or you can keep working with your supplier. So a problem has come up and you might have some crisis management around that to deal with it, but ultimately the choice you've got to make is do we cut them off or do we keep working with them regardless? And if we keep working with them regardless, how do we do that given what's happened? And answering that question is enormously difficult when you don't have those things.

What the model clause of projects and advice from firms like ours attempts to do is to put people into a situation where their choices are no longer binary. Where you have a palette of options available to you to respond to situations when they arise and that those, that pallet of options is something that then flows down the supply chain. So you have flow down clauses that go to the sub-suppliers and so on and so forth.

And we know from experience working with sophisticated, multinational enterprises that that works. You can very effectively establish, an effective informational chain so that you have informational rights that flow up the supply chain to make sure that you are informed, and that you have an effective remediation chain that flows down the supply chain to remedy problems when they arise.

And now, as Rambod knows, there's again, there's no silver bullet is an easy, easy way to how you structure those. And it, who bears the risk and where it's right to bear the risk. And the cost of that is the, answering that is a very complex question. Very, very situation, situation specific.

But I think the key sort of point here is that, the more that model clause clauses get developed, the more options, become available. And you are helping organizations and the people who work under them, which is after all why we're all here, have more options available to them, to, remedy situations of exploitation when they come up.

Rambod Behboodi:

On that I'd say mildly optimistic notes - and we like to end on optimistic notes - this brings us to the end of the sixth episode of the Tariff Home Companion, and the last episode of this season. Stephen and I thank our guests, Kate and Benedict, for their invaluable insight into the knotty, and perhaps naughty, issue of trade and labour.

Finally, it takes a village to conceive, produce, edit, and promote a project like this. Special mention goes to Jason Chute, our producer; Noor Elsabagh, our Articling Student; Kevin Leonard, our editor; and Kate Gifford, who takes care of the social media aspects of the podcast series. Thank you.