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View Lisa Raitt Profile
CPC (ON)
View Lisa Raitt Profile
2015-06-03 15:12 [p.14536]
moved for leave to introduce Bill C-62, An Act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another Act.
View Erin O'Toole Profile
CPC (ON)
View Erin O'Toole Profile
2014-10-27 15:19 [p.8812]
Mr. Speaker, it is my privilege to stand today in the House to commence third reading of Bill C-41, the historic Canada-Korea free trade agreement, which, as I have said in the House before, represents Canada's first free trade agreement in Asia. It is a free trade agreement with a partner country in Asia that represents the third-largest economy in Asia, and it is a country Canada has had a strong, and in fact, historic and deep relationship with for almost 70 years.
The Republic of South Korea represents a population of 50 million people and an economy of $1.3 trillion. It is the 15th largest economy in the world by GDP, and it is already Canada's seventh-largest trade partner in terms of two-way merchandise trade. It is a very exciting opportunity for us.
In my remarks I will also touch upon some of our strong ties. They make our agreement with Korea an important one, as our first in Asia, with an appropriate partner, given our shared history.
It is also strategically important, because in recent years, some of our friends and competitors in global commerce have reached agreements with South Korea. In 2011, the European Union reached a free trade agreement with South Korea. We have seen tariff rates drop for exporters in the EU countries. More critically, in 2012, the U.S. entered into a free trade agreement with South Korea. Months before we reached our final agreement, Australia reached an agreement in principle and a final agreement with South Korea for free trade.
That is critical, because these are some of our strongest friends and allies, but they are also our competitors. For some of our world-class exporters in industrial goods, agriculture, seafood, and forestry, which are some of the sectors that will have tremendous opportunities in Korea, their main competitors are in that market. It is critical for our country to take advantage of a free trade agreement that will get our exporting sectors, particularly some of our lead sectors, back on a level playing field with their international global competitors.
The review of this agreement and the opportunity it presents to Canadian exporters is tremendous. It is expected to increase trade by 32%, for a net impact of almost $2 billion on the Canadian GDP. It is historic.
As I have said in the House many times before, particularly to some of my friends in the opposition who forget this key statistic, one out of every five jobs in Canada is directly attributable to trade. Canada is a country of 33 or so million people. It is one of the best, brightest, and wealthiest countries in the world, with tremendous resources and tremendous people. It is a strong, diverse country, with an economy that reflects that.
However, in a global economy, we cannot survive by just selling to ourselves. I am proud to be part of a government that has put trade at the forefront of its economic strategy.
Another point I have raised in the House before is that it is actually Conservative governments that have secured almost all of our market access for exporters. Those one in five jobs are, in many ways, attributable to both the Progressive Conservative government of Brian Mulroney, with the historic U.S. free trade agreement and NAFTA, and, critically, this government and our Prime Minister and the Minister of International Trade. I work with them closely as the parliamentary secretary. They have secured 98% of market access for our exporters. That is truly an incredible statistic. It is virtually all their market access. In fact, many of the very few small free trade agreements the Liberal government of Prime Minister Chrétien was able to secure we are actually going back and enhancing and augmenting to make them better.
I am glad we are here at third reading, and I am glad the NDP has made a strong decision, for once, on trade and will actually support this agreement and our swift passage of this bill, Bill C-41, because January 1 is a critical deadline for our exporters.
I said earlier in my remarks that our competitors in the EU and U.S. already had free-trade agreements. New tariff reductions will kick in on January 1 and if we do not have our agreement in place by January 1, yet another little delta, another little change between Canada and its competitors will come into place. That is something we just cannot afford to happen.
I would like to thank John Masswohl from the Canadian Cattlemen's Association who appeared before the Standing Committee on International Trade on this very point, saying that as of January 1, tariff rates would change for beef, a key sector for us in South Korea, and our American competitors in that space will leap ahead as that tariff rate ticks down. I think he said that there would be a point spread of 10.7% between our world-class beef and some of the American beef. This shows us that time is of the essence, and that is why I am glad we are here at third reading. It looks like we are on track to have this in law and able to take advantage by January 1 and not fall behind some of our key competitors.
In my speech at second reading, I took time to talk in-depth about the relationship between our countries and about the visit I had to South Korea several months ago to help secure passage of this deal through its national assembly. I spoke about how touched I was by the person-to-person ties that had been developed between our countries.
Indeed, South Korea represents one of our best friends as a nation and a key ally in Asia. It is an almost a 70-year relationship, starting with missionaries, many of whom were still remembered in Seoul when we were there. They were bringing faith and education, and enhancing education on the ground, ensuring it was accessible for more people.
We can see the tremendous progress that has taken place since then. A country that 60 years ago was one of the largest net recipients of food aid from around the world is now one of the largest contributors of money to the United Nations' food programs. It is a remarkable statistic accomplished in just two generations. Education, openness and an increasingly strong democracy in South Korea has been key to that achievement.
There are approximately 200,000 or so Korean Canadians who have also been key in building these bridges between our countries, and I spoke about several of them. I still speak with Mr. Ron Suh, who was on the ground in Seoul. He advises the government of South Korea as part of the National Unification Advisory Council. People around the globe with Korean lineage work with the country on the ultimate goal of having North Korea emerge from its decades of darkness and reunify the peninsula again. Mr. Ron Suh remains a strong component. He is an example of one of these 200,000 Canadians who have brought our countries closer together and who are very supportive of this deal.
For me, as someone who served in uniform for 12 formative years of my life, the highlight of my trip to South Korea was spending time with Minister Park, the minister for Patriots and Veterans Affairs in South Korea. I found that title unique and I asked him about it. When the people were under attack from the north and from Chinese forces, it was not just the military or nations like Canada that stood firm with them to try to preserve their country, but also members of their public. Everyday citizens were called into action, and they are referred to as the “patriots”. It was not just uniformed members of their military; indeed, it was everyone, men, women and children in some cases. They are the patriots in the department of patriots and veterans affairs.
Our delegation joined Minister Park at its national war memorial and war museum. We laid wreaths at the Hall of Honour, where the 516 Canadian names appear on the tablets, the ones from the almost 26,000 Canadians who responded 60 years ago to the United Nations call to respond to the conflict on the Korean Peninsula.
Staring at those names as a modern day veteran was moving, names from across the country, French and English. These were young people in their prime, many of whom had served just years earlier in World War II and served again. Without hesitation, the Korean people deeply respect that sacrifice and remember it to this day.
In my last speech in the House, I said that from school children to ministers of the government, everyone thanked our delegation for Canada's historic efforts to secure their democracy and the country that is South Korea today. That is moving when we see remembrance as a cornerstone of their civic duty and culture.
For me, I am also fortunate. A good friend from my riding who lives not far from me in Durham, Mr. Doug Finney, is the president of the Korea Veterans Association of Canada, working with veterans on remembrance, both here in Canada and in Korea.
Ted Zuber is a war artist. He is from the Royal Canadian Regiment. One of his stunning paintings fundraised by the Korea Veterans Association has a place of honour in their national war museum. It depicts some of the battles related to the Battle of Kapyong, in which the Princess Patricia’s Canadian Light Infantry demonstrated heroics, saving Korean, American and Australian lives with that tremendous battle, even calling in fire on Hill 677, their own position to hold that line.
To this day, the PPCLI remains one of the few world regiments that has the U.S. presidential citation that members wear on their uniforms. That is for the heroic deeds at Kapyong.
It was very important for me to write in the Book of Remembrance that I was visiting its museum in the centennial year for that regiment, a regiment that was founded in Ottawa 100 years ago last month.
We were fortunate just last month, September 20 and 21, to have a state visit from President Park from South Korea as part of our historic engagement on this free trade agreement. I was fortunate to join the Prime Minister, other members of the House and my friend Doug Finney on behalf of the Korea Veterans Association at a state dinner hosted by the Governor General.
It was clear, the affection between the countries, from all the remarks that evening. The Governor General himself reflected on his recent visit to South Korea, describing it as both a beautiful and flourishing country. What struck me in particular about his remarks was he said that he greatly admired its tenacity and creative spirit. I hope Canadians can see that we are indeed part of helping them establish the modern country they have today.
This agreement, in many ways, represents the next stage in our relationship as two countries. This will reduce tariff rates between our countries to allow us to trade under most favoured nation status. Most favoured nation should be the status between countries as close as ours.
I recited dozens of tariff lines in my speech at second reading. I certainly do not want to bore the House too much with the same tariff lines. Therefore, I will try, for a few moments, to talk about how these tariff lines, 4.7, 10.8 that seem like regulatory numbers lead to jobs. One in five Canadian jobs is attributable to trade, as I said at the outset. I will talk about a few strategic markets for that.
Seafood is a huge winner. Having lived in Atlantic Canada for many years, and having married into the Atlantic Canadian Grant family in Fall River, Nova Scotia, I know how proud Atlantic Canadians are of their seafood industry. Newfoundland, Prince Edward Island, New Brunswick, Nova Scotia have tremendous wins. Canada is recognized for seafood, and there are tariff rates of up to 47%.
At 47%, if they have to add that to their price, our exporters, our fisher processors and our fishermen will not have access to that market, lobster in particular. Atlantic lobster is the best in the world, bar none. It is already selling in to the market in South Korea. I said in my last speech how at Chuseok, the South Korean thanksgiving, lobster is considered a treat that South Koreans bring to their family to celebrate thanksgiving and their origins. It has a 20% tariff rate for live and processed lobster. Eliminating that at a time when we already have access to that market, even with the higher price because our lobster is better, just means huge opportunities for Atlantic Canada.
While in Halifax on a visit, I had the pleasure to meet with officials from Korean Airlines, which has already started direct cargo flights from Halifax of Atlantic lobster, primarily from New Brunswick and Nova Scotia, to take advantage of the market. As of January 1, once we get this through the House, the 20% tariff rate will come down, meaning huge opportunities for Atlantic Canada.
Regarding industrial goods, I am from Ontario and we are very proud of our manufacturing industrial sector. Ninety-five per cent of tariff lines will be eliminated when this agreement comes into force. Why is that so important? Increasingly, in our global economy there are global supply chains. Even if there is a manufacturing plant in a country in Asia, it may source supplies for its assembly from around the world. We are seeing that already. Great Canadian companies like Magna and others have already taken advantage of this in auto and elsewhere. This is an opportunity, with these tariff reductions, to have more of our companies compete for work in the supply chain. The South Korean conglomerates are well-known in trade around the world, and that is an opportunity for our employers.
In agriculture and agri-food, 85% of agricultural tariff lines come down as part of this agreement. There are huge wins for pork. I toured the facility in Brandon, Manitoba along with the MP for Brandon—Souris. There is huge opportunity in that industry.
For beef, grain and oil seeds, there are huge wins.
For fruits, such as blueberries from Atlantic Canada, there are tariff reductions on all of them. It means great opportunities as the people of the rising middle class in South Korea demand high-quality food from a safe, strong, healthy regulatory regime like Canada's. They will pay more already but with tariff lines coming down, it will be even more competitive.
David Lindsay from the Forest Products Association of Canada appeared before our committee. In regard to forestry products, there are tariff reductions in the range of 2.9% to 10% for wood and finished wood products. I toured with an employer who has assembly plants for value-added wood products in Ontario and in British Columbia. He predicted doubling his workforce based only on the South Korea market. He is certainly equally as optimistic about the European Union trade agreement and some of our other negotiations, but that is for this one country alone because of the burgeoning middle class in that country.
We are very proud of our auto industry in Ontario. As I said in my last speech on this issue, my dad is a GM retiree. I am proud of our roots in the Oshawa area for auto manufacturing. We have secured a deal that is equal to or even better than some of the outcomes the U.S. achieved for autos. What is critical here is entering into the supply chain and jobs in the auto supply and parts sector is as critical to the Ontario economy as it is to the big manufacturers. As I said in my remarks the first time, what many Canadians seem to forget is we are very proud of Ford, Chrysler and GM, and it came up in question period today. They are all subsidiaries. The senior management teams in each of those cities do not make the decision on what rolls off the production line. That decision is made in the United States, which already has a free trade agreement with South Korea.
Why, as responsible legislators, would we allow our auto sector in Ontario to have one less country it can access on the same terms as the U.S. plants? We know that in this global auto age, they compete against one another for jobs.
This is a huge win for Canada. It is up to a $2-billion hit to our GDP. I really hope that all members in the House vote in favour and that we have quick passage.
View Don Davies Profile
NDP (BC)
View Don Davies Profile
2014-10-27 15:51 [p.8816]
Mr. Speaker, it is a privilege to stand in the House to speak on behalf of the official opposition New Democratic Party on Bill C-41, which is an act to implement the Canada-South Korea trade agreement. Once again, on behalf of the New Democrats, it is also a privilege to stand and support this agreement. There is no question that the overwhelming evidence is that this agreement is not just of net comprehensive benefit to Canada, but, in my opinion, it is of significant benefit to the Canadian economy, and that includes Canadian workers.
The Canada-Korea trade agreement is also a critical opportunity for the Canadian economy, which we simply cannot afford to miss. As has been pointed out in the House before at second reading, we do not negotiate in a vacuum. The Canada-South Korea negotiations for a trade agreement took place in the context of other trade agreements being negotiated, notably the United States and the European Union, both of which concluded trade agreements with South Korea before Canada did, in 2011 and 2012 respectively.
That means that businesses in the United States and the European Union both had access to reduced tariffs that Canadian businesses have not had. Since those agreements have been in place over the last two and three years respectively, Canadian businesses, sector after sector, have told our committee that they are losing market share in South Korea as a result.
It is our opinion that even if we wanted to oppose the agreement, the context is such that we could not, because Canadian businesses simply cannot compete in a world where their competitors are getting tariff reductions that they are not. I might also point out that Australia, which is a very direct competitor to Canadian producers in a number of areas, has also just concluded an agreement with South Korea.
I will be talking about this at the end, but I also want to point out that New Democrats have a coherent and well-thought-out lens through which we evaluate trade agreements. This is unlike the Conservative government, which seems to support trade agreements with anybody at any time, regardless of what is in them, or the Liberal Party, which opportunistically will support an agreement and then not talk about it.
We asked ourselves a number of important questions. New Democrats asked first of all what characterizes our proposed trade partner: Who is our proposed trade partner? Can it be said that they are a modern democracy with respect to the rule of law, democracy, and human rights? Or, if there are challenges in that regard, can it be said that they are on a positive trajectory?
Second, is the economy of strategic or significant value to Canada? The Conservative government has been a broken record in terms of bragging about the agreements it has signed over the last six years. However, most, if not all, of those agreements have been, with the greatest of respect, economies that have very little trade with Canada and do not have significant or strategic value to our economy. These are countries like Honduras, Panama, and Jordan. As important as these countries are, and as important as it is to have good relations with these countries, I do not think anyone is going to delude themselves into thinking that trade agreements with those countries are going to have a significant impact on the Canadian economy.
South Korea is different in that regard. South Korea is a member of the G20. It is the fifteenth-largest economy in the G20. It is a multi-party democracy with robust rule of law. It has the highest post-secondary participation rate of any country in the OECD. Canada and South Korea are complementary economies. That is an important point. In most respects our sectors are not in direct competition with each other, and our economies are mutually beneficial.
South Korea is also a world leader in green technology, in renewable energy and energy conservation.
I will repeat what I asked in my question for the hon. parliamentary secretary. South Korea has dedicated 2% of its GDP per year to the green technology sector. South Korea is a trillion-dollar economy annually. That translates into $20 billion a year that South Korea is investing in what is clearly an economic direction for the future.
One of the many reasons that New Democrats believe this agreement has the capacity to be very positive for our economy is because New Democrats believe that, wherever we can, the Canadian economy should be steered in a direction where we are replacing outmoded forms of energy, polluting forms of energy, with sustainable ones.
Canadians often see a lot of rancour, discussion, debate, and argument back and forth in this House. They often do not see when Parliament works in a positive way. This is one example where it has, with all parties on the trade committee participating in the deliberations of this important agreement.
Canadians may know that after second reading in this House, and after a vote, then legislation goes to a committee. In this case, this agreement went to the international trade committee where we debated the legislation. We importantly called and heard from witnesses about their points of view on this legislation. We also had an opportunity to propose amendments.
The New Democrats were the only party that proposed amendments at second reading. Neither the Liberals nor any other party proposed any amendments. I will be talking about that in a moment. I think those amendments would have strengthened this agreement.
MPs heard testimony during the committee that was very favourable to the agreement. In fairness, we heard some testimony that was not favourable. We also heard testimony prescribing next steps for the Canadian government and exporters, as we seek to realize the full potential created by this deal both for Canadian enterprises and workers.
On behalf of the New Democratic Party, I would like to thank the witnesses for their efforts in raising awareness about different components of the deal and its impact on their sectors. It added some very important information for us as parliamentarians, and I want to highlight some of that evidence.
The testimony that we heard essentially amounted to a strong exhortation that the federal government have this agreement in place before January 1. As I stated, the context in which we evaluated this deal is one where we have competitive agreements and competitors around the world who are beating us to the market because of the tariff reductions they are enjoying and that Canadian producers are not. We also heard from sectors that believe this agreement may present challenges for them.
In an effort to strengthen the deal for Canada, and consistent with some of those suggestions from witnesses, New Democrats moved a number of common sense amendments to address those concerns. We are somewhat disappointed that the Conservative government was unwilling to work with the opposition to strengthen the deal. They rejected all six of our amendments. Nevertheless, the NDP will continue to offer concrete proposals to ensure that the full potential of this deal is reached and that Canadian businesses and workers benefit.
Committee members were privileged to hear the testimony of the chief negotiator for Canada in these talks, Mr. Ian Burney, who very clearly and succinctly unpacked the many components of the trade deal and articulated their significance for the Canadian economy. Here are some highlights of his testimony.
The outcomes are particularly advantageous for Canada when you consider that Korean tariffs are on average three times higher than ours, 13.3% versus 4.3%. [...]For example, in the sensitive fish and seafood sector, where Korean tariffs run as high as nearly 50%, we've obtained faster tariff elimination.... In agriculture, Korea's most heavily protected sector, with tariffs approaching 900%, we've achieved better outcomes than our competitors.... There will also be major benefits across industrial and manufacturing sectors in Canada, including aerospace, rail, information technology goods, chemicals, and pharmaceuticals to name a few, where Korean tariffs can run up to 13%.
Mr. Burney, primarily in answer to questions raised by the New Democrats, addressed concerns about the impact of the deal on Canada's auto sector. Here is some of his perspective on the matter. He pointed out the following:
...most Canadian production, in fact, almost 90% last year, is exported and so will be unaffected by the increased competition in the Canadian market. Moreover, Korean-branded cars sold in Canada are, as you know, increasingly coming in from plants in the U.S. duty-free under NAFTA. That volume is already close to 50%, so the protection afforded by the tariff is declining in any event.
I would point out that we also have information that Hyundai is opening two auto plants in Mexico in the next two years, an assembly plant and a parts plant, which would be capable of producing several hundred thousand units a year. Therefore, that 50% vehicle entry into Canada from Korean manufacturers is no doubt going to go up.
Mr. Burney continued:
With respect to the Korean market, [where] it remains challenging, there is no doubt it is opening up. Imported auto sales in Korea have been growing at about 30% annually over the last four years. The import penetration rate has increased from about 3% when our negotiations started to over 12% today, meaning that nowadays one in eight cars sold in Korea is an imported vehicle.
New Democrats believe that trajectory has to be watched carefully so we can ensure that Canadian auto products do indeed have access to the Korean market, which up to now has been identified as one of the more closed markets in the world.
The NDP is also proud to join the United Food and Commercial Workers, Canada's largest private sector union, in supporting the Korea trade agreement and its positive potential for tens of thousands of unionized workers in Canada.
Here are some of the words of UFCW legislative director Bob Linton:
UFCW Canada believes that the Canada-Korea free trade agreement overall will be a good deal for Canadian workers.... Korea is heavily dependent on food imports with a demand exceeding $28 billion annually. Korea is Canada's fifth largest agricultural food export market. It has a population of 50 million relatively high-income citizens....
He continues:
Furthermore, increasing trade with Korea and other similar countries is a crucial step [in] diversifying our export industries, reducing risks and dependence on the...U.S. economy.
He also said:
This agreement means that not only members at our locals in Quebec, such as Local 1991, and Ontario, Local 175, will benefit from this free trade agreement but locals in Alberta, such as Local 1118 and 401, and Saskatchewan, Local 1400, will also have the potential to benefit. This deal will not only help to protect the jobs of our members in these provinces but has the potential to increase employment with good union paying jobs that benefit the communities.
Committee members also heard testimony from business and community leaders in Canada's vibrant Korean-Canadian community. Two witnesses I was privileged to put on the list were from British Columbia, Mr. Mike Suk and Mr. David Lee, who described to committee the potential benefits that this deal could bring to the Korean-Canadian community.
Here is a highlight of the testimony by Mike Suk, president of the Korean Cultural Heritage Society:
In less than 60 years South Korea has made its mark on the world stage. Cutting-edge industries have developed in Korea. Korea has also emerged as an influential tastemaker in Asia. I believe companies in Canada, through joint ventures with South Korea, [businesses] will gain favourable access to other high-growth emerging markets in Asia.
I would point out that this is Canada's very first trade agreement with an Asian country. This is another salient factor that went into the New Democrats' decision to support the agreement. Not only does this represent the so-called Asian pivot, where it is important for Canada's economy to establish strong and deep and broad economic relations with Asian economies, but Korea also represents an important gateway opportunity. We will penetrate the Korean market that provides opportunities for us to access the broader Asian market as well.
I want to talk very briefly about the amendments that the New Democrats proposed, which we felt would strengthen the agreement.
Our first amendment would amend the bill to add a clear preservation of the right of Canadian governments to legislate and regulate in the public interest. By way of brief explanation, the New Democrats do not believe that investor state provisions ought to be put into free trade agreements.
In this case, if an investor state agreement is put into an agreement, then we would like a crystal clear and explicit statement in that agreement that nothing in that trade agreement, but nothing, would trump the sovereignty of the states involved to legislate or regulate in the public interest. That is not clearly set out in the bill, and we thought it ought to be.
The second amendment would amend the bill to explicitly prohibit the weakening of environmental standards in order to attract foreign investment.
In fairness to the agreement, it does have a significant amount of language on the environment. However, in our view, when it comes to the environment, we cannot be clear enough. No trade should be facilitated, ever, by a diminution or reduction in environmental standards, and Canada should say so directly in each and every trade agreement that it signs.
The third amendment amends the bill to repeal the investor state dispute settlement chapter from the agreement. As my hon. colleague, the parliamentary secretary stated, Korea and Canada both have robust, mature judicial systems. There is absolutely no rational basis for including an investor state provision in an agreement when investors have full protection and recourse to the judiciaries of both countries to protect their investments and business interests.
Our fourth amendment would amend the bill to require annual Canadian trade missions to Korea to monitor the elimination of discriminatory non-tariff barriers and the implementation of the agreement and report back to Parliament annually. Every single auto company has told us that South Korea has historically utilized a series of non-tariff measures. We could fail to experience any benefits of a trade agreement if a country does two things: if it implements non-tariff barriers and if it manipulates its currency. It could wipe out any potential benefits that a trade agreement would give us by tariff elimination.
The New Democrats, quite thoughtfully and reasonably, suggested that we go every year, at least upon implementation of this agreement, perhaps the first five years, and take representatives of all industries and labour with us and monitor the non-tariff barriers of South Korea to ensure that companies in our country do get the benefit of this agreement. Unfortunately, the Conservatives chose to vote against that thoughtful amendment.
Our fifth amendment would amend the bill to require the inclusion of a snap-back provision for Canadian auto and steel tariffs in the event of a surge in vehicle imports or steel imports from the Republic of Korea. We have heard different testimony on this. I remain of the opinion that we should get what the U.S. got in its agreement with South Korea, which was a snap-back provision. What that means is that if it was found over a period time South Korea market access was not being realized, or it was found there was a dumping of South Korean imports into, in that case, the United States, the tariffs would snap back to protect the domestic industry. We thought the Canadian steel and auto sector ought to have the same protection that their colleagues in the U.S. have.
The sixth amendment is the one that is specifically on steel. Unfortunately, the Conservatives voted down each one of those amendments. I am disappointed that they did.
At the same time, I want to mention that South Korea has been identified in the past as one of those jurisdictions that has been accused of intervening in its currency to artificially suppress its currency level as a means of boosting its exports. I make no such accusations in this regard, but that has been identified.
New Democrats, before committee, announced to Canada that we would be proposing the following motion at committee to address this major trade barrier, which is currency manipulation. It reads:
That, pursuant to Standing Order 108(2), the Committee undertake a study of the use of currency intervention by states throughout the world to create advantages in international trade, policy options available to address unfair currency interventions, and report its findings back to the House. The focus of this study should include:a) Investigating the challenges and opportunities in using trade and investment agreements to address currency intervention;b) examining the status of progress at multilateral bodies in developing fair international rules on currency intervention; andc) balancing respect for sovereign nations in the management of their monetary policy with the development of fair international rules to level the playing field for exporters in all countries.
People as diverse as the U.S. manufacturers association, the Canadian Council of Chief Executives, Ford Canada and any number of people involved in import and export understand the importance of currency in expanded trade opportunities. Regrettably, our motion will not be studied, at least now, before our committee. That is disappointing as well because we think that having a stable and fair currency trading system is key to establishing a smart trade policy for Canada.
Canada is a trading nation. We have always been a trading nation. We continue to be a trading nation. New Democrats will continue to suggest intelligent, thoughtful and prudent measures that will not only boost exports for Canadian champions around the world but also make sure that we can create those value-added, good-paying jobs here at home that are the hallmark of every modern industrial economy.
View Guy Caron Profile
NDP (QC)
Mr. Speaker, I am pleased to rise in the House to speak to Bill C-41, which will implement the free trade agreement between Canada and the Republic of Korea. I am very pleased because, honestly, our position makes me smile and laugh. As deputy international trade critic, I am pleased to confirm what our senior international trade critic said, and that is that we are going to support this bill to implement the trade agreement at third reading.
This makes me smile because, unlike what our opponents, the government members, like to say, we are not a party that is against international trade. We are not anti-trade, quite the contrary. If members want to ask me questions about that, they should also speak to the member with whom I have been communicating over the past two, three or four years on economic issues. They will see that as an economist, I am in favour of the principles of trade agreements and that the value of each trade agreement that we sign or negotiate must be assessed based on the content and details of that agreement.
Furthermore, I think that we cannot repeat often enough the basis on which the NDP, the official opposition, assesses these trade agreements. We have three criteria. The first pertains to the notions of democracy, respect for human rights, and respect for environmental rights and working conditions. When we signed NAFTA, or even the initial agreement between Canada and the United States, there was an entire section regarding environmental issues and respecting environmental rights and working conditions. However, only side agreements were signed, and they were not as restrictive. We then saw that very few complaints were lodged about NAFTA. Complaints were made regarding working and environmental conditions, but they did not end in a court decision. The process clearly has no teeth.
What we on this side of the House want is for the negotiation of trade agreements to be used as leverage with the country we are negotiating with in order to raise that country's environmental and democratic standards, as well as its standards related to human rights and working conditions.
We think this first condition is essential, which is why we repeatedly said that we opposed the agreement with Honduras, because the agreement did nothing to raise these standards.
The second condition is the economic and strategic value of the agreement in question. There is no denying that South Korea is a significant trade partner. South Korea is Canada's seventh-largest trade partner and its third-largest in Asia. The standard of living, or more specifically, the per capita income in Korea, if we evaluate it based on purchasing power, is about 75% of that of Canada, and that is rather significant. From a strategic standpoint, therefore, no one can deny the importance of South Korea.
More specifically in terms of agri-food, and because the region I am honoured to represent relies on agri-food for 12% of its economy, it is important to point out that South Korea is our fifth-largest partner in this area. In terms of current global exports, South Korea is as important as Germany or France as a trading partner. Exports are currently worth over $3 billion.
In fact, this brings several questions to mind. As I said at second reading, an internal memo from the Department of Foreign Affairs and International Trade raised the problem that the government was squandering too many resources on issues that had less strategic value and that the resources were not available to negotiate and eventually conclude as agreement as important as the one with South Korea.
I think the government needs to seriously address this issue at some point, because putting these resources into an agreement with Honduras when our trade with that country is worth a little over $40 million and neglecting the negotiations for an agreement with a trade partner worth over $3 billion in exports is highly problematic in terms of the government's ability to effectively negotiate trade agreements. Thus, there can be no question about the economic and strategic value of the agreement.
This brings us to the third criterion we used to analyze the agreement: the actual terms. Obviously, the Standing Committee on International Trade did its job. I know that a number of members of the House also assessed the consequences of the agreement for our ridings and the economies of our regions. As with any trade agreement, certain sectors will benefit in the short and medium terms, while others will face economic challenges once this agreement is implemented.
I am going to talk about the advantages and disadvantages. As far as advantages are concerned, the beef industry will benefit rather quickly from the phasing out of the 40% tariffs imposed on that sector. Some members of the House have already mentioned that. The United States also opted to have this tariff phased out when it signed the agreement in 2012.
Our share of the beef market in South Korea has decreased tremendously because of our diminished competitiveness compared to the United States. Tariffs on the U.S. are currently 32% and are decreasing by 2.7% a year, while tariffs on our products are 40%. This is a real red flag. These market shares we are losing for our beef sector have to be recovered quickly.
In 2002, our beef exports to South Korea totalled $50 million. After the South Korean embargo was lifted in 2012 and the South Korean market was finally reopened, beef exports totalled $10 million. The following year, in 2013, these exports dropped to $7.5 million. The difference in tariffs has had a huge impact, and that is why we must use the agreement with South Korea to minimize and eventually compensate for and eliminate the competitive difference between Canadian and American exports.
The European Union and the United States signed agreements with South Korea in 2012 while our own negotiations lagged, mainly for lack of resources. This resulted in a 70% drop in our share of the agri-food market. However, it is an important sector of our trade with South Korea. It was quite irresponsible not to put enough resources into concluding an agreement with South Korea more quickly. It took 10 years to negotiate.
I was talking about the elimination of 40% tariffs on the beef industry. Tariffs of 18% on beef offal will eventually be eliminated. For pork, these tariffs can reach 25%, depending on the product. These tariffs will gradually decrease to allow our farmers to open up a market. This decrease will be welcomed in the pork industry in particular, since there is currently uncertainty in that sector as a result of our trade with Russia, which was a big consumer and importer of Canadian pork.
A number of areas stand to win, as pointed out by most of the people who came to the Standing Committee on International Trade. The aerospace sector the forestry sector, which is an important industry to my region and riding, stand to gain a lot. Furthermore, tariffs for various forestry products, which vary from 8% to 13%, will eventually be eliminated. Tariffs for other sectors, such as mining, transportation, fish and seafood, which could go as high as 50%, will also gradually be eliminated. Some sectors stand to benefit a lot. Furthermore, nearly 87% of all the tariff lines that imposed tariffs on our exports to South Korea will eventually be eliminated.
One of the reasons why we are supporting this agreement is that it is 100% reciprocal. Once again—and earlier I heard a speech that mentioned this—we need to consider South Korea's tariffs on Canadian products. They were much higher than Canada's tariffs on South Korean products. This will give our exporters access to a market that did not use to be as open to Canadians as the Canadian market was to South Koreans.
Obviously, if at some point we are unhappy with something in the agreement, if there are disputes about the effects of the agreement, there is always a way to renegotiate or revoke it. This, however, would take six months. Everything can be renegotiated.
We also raised concerns about the investor state dispute settlement mechanism, and I will come back to that. It is very important to have that six-month time period. It cannot be so long that it ties the hands of future governments—that is a fundamental principle of democracy—as is the case, for example, with the Canada-China foreign investment protection agreement, which is binding for 31 years.
In all of the trade agreements that we have signed in the past, that fundamental principle allowed us to renegotiate or open up the agreement to include or withdraw certain clauses, obviously with our partner's consent, over a six-month period or with six months' notice.
This new investor state dispute settlement mechanism contains more progressive transparency measures than previous incarnations. These measures are welcome. When it comes to the lack of transparency in the process, this is one element that really worries those who want to ensure that the recourse measures to ensure compliance with trade agreements are democratic and open.
The disadvantages have been talked about in committee and by the media. There are a number of risks related to the challenges facing the automobile and steel industries. A representative of Unifor, the main union representing auto workers, expressed his concerns about these agreements. This might come as a surprise, but the Canadian Council of Chief Executives had the same concerns. I should point out that we import around $3 billion worth of South Korean cars but export just $15 million worth of Canadian or Canadian-American cars.
This is a major concern for the union and the automobile industry. We had a 6.1% tariff on South Korean cars, but there was an 8% tariff on cars we exported to South Korea. The tariff was higher. That is not the only reason for the big difference, and people have pointed that out, but we still have to pay close attention to the auto sector and the impact of this agreement on it. As I said, the Canadian Council of Chief Executives has recognized this particular challenge. In committee, it suggested that we should develop a special strategy for the auto sector vis-à-vis the Korean market for automakers. Here is what it said:
...that Canadian auto and auto parts manufacturers are positioned for success. Such a strategy could examine exports, two-way foreign direct investment, and non-tariff barriers as well as cooperation with other major auto and auto parts exporting nations that have free trade agreements with Korea, to ensure an open market for foreign products.
This specific problem for the auto industry was raised by the Canadian Council of Chief Executives, among others, and must be taken seriously. In fact, this was included in one of the amendments that we tried to propose. We proposed it at the Standing Committee on International Trade and it was rejected by the government members on the committee. We proposed five amendments and they were all rejected.
There is a lot of talk about the investor state dispute settlement mechanism, but that is not the only thing we proposed. The government could have accepted entirely reasonable aspects, such as sending a Canadian mission to South Korea to oversee the implementation of the agreement and report on the progress of that implementation. In fact, I asked the member for Huron—Bruce about that. This mission should report regularly, every year, until it is no longer necessary to do so.
The government members rejected this idea. Again, to reassure those who might be concerned about this, we proposed an amendment whereby no environmental law could be repealed or amended in order to increase investment. These are laws for the common good. These are the environmental protections the public called for and we recommended, not to put up an obstruction or a non-tariff barrier, but truly for the common good. The government refused.
The measures we proposed sought to respond to the concerns we on this side of the House are hearing. The last amendment we proposed responded precisely to the request by Unifor and the Canadian Council of Chief Executives; it was aimed at developing a strategy to help the auto industry and the steel industry meet the challenges that the implementation of this trade agreement will present.
In closing, I would like to speak to this issue of the investor state dispute settlement mechanism. I heard the parliamentary secretary say that this was the cornerstone of every trade agreement that has been and will be negotiated by Canada.
There is no international consensus. Many countries are asking questions about the validity, usefulness and relevance of this mechanism. The first time it was proposed in the context of trade negotiations was for NAFTA, in response to concerns that Canadian and American investors had regarding the strength and soundness of the Mexican legal system, in particular. That is where the idea of an external mechanism came from. No one said that this had to be done behind closed doors, but that is what happened. No one was supposed to say that the Canadian or American legal system had not been used. However, this agreement goes beyond Canadian and American legal powers. The fact remains that it was originally in response to the perceived lack of soundness of one of our trade partners, namely, Mexico in this case.
This issue can also come up in the negotiation of trade agreements that we, as a party, if we formed the government, might negotiate less aggressively than this government is doing. I am thinking of countries like Honduras and Panama and other countries we do business with that not only have serious problems when it comes to human rights, environmental rights and working conditions, but also have legal systems of dubious soundness and impartiality.
Is that the case with South Korea? I do not think so. Is that the case with the European Union? I do not think so. Should we automatically include an investor state dispute resolution mechanism in situations where our trading partners have respected, impartial systems that can serve as tribunals in the event of any investor complaints regarding what is perceived as an impediment to investments or profitability, which would ultimately be a non-tariff barrier?
This mechanism remains controversial and will continue to be debated. I categorically reject the government's contention that this is the cornerstone of the agreement. On the contrary, in the months and years to come, we will see more and more countries raising concerns and asking questions about the relevance of automatically having such mechanisms in every agreement. As I mentioned, the new president of the European Commission and countries such as Austria and Germany are beginning to publicly air their concerns.
Nevertheless, we support Bill C-41 at third reading stage. We support the principle of the agreement with South Korea, which may not be the agreement we would have negotiated but, for the time being, satisfies the three criteria we use to assess the relevance and desirability of a trade agreement. We will gladly vote for this bill.
View Kevin Lamoureux Profile
Lib. (MB)
View Kevin Lamoureux Profile
2014-09-30 10:27 [p.8012]
Mr. Speaker, I am not too sure of the terminology of investor state agreements that the member is referring to. I will take her at face value. Obviously in any sort of an agreement there are always certain aspects that raise concerns. What we are talking about is the overall principle of having free trade agreements, and the benefits to Canadians as a whole have been, generally speaking, very positive.
There are always going to be concerns. When I think of the Korea agreement, for example, one of the biggest concerns that I and members of my caucus have is in regard to the automobile industry. We are very sensitive to that industry and the needs of that industry. This is an industry where, again, through time, we have seen very progressive, liberally minded prime ministers talk about ways in which we can expand that industry and complement it.
Whenever there is a trade agreement, one of the more responsible things to do is to look at where and how that agreement would impact real jobs here. For example, in the Korea agreement, part of the concern I have, and I know many of my colleagues share it, is the automobile industry. When we talked about the European Union agreement, I raised the issue of the impact on cheese sales. There are always going to be different aspects of an agreement, but in general I believe that free trade agreements are a positive thing and we have to recognize that in principle.
As for the point of order from my New Democratic Party colleague, this is the first time in all the months or years of my challenging the NDP that they have actually suggested a date. I look forward to doing the follow-up and I will look into that date. I would be shocked to find that all the members of the New Democratic caucus actually voted in favour of that agreement. However, I will wait and do a little research on that date. I was encouraged. This is the first time in which an NDP member has actually stood and declared a date, but I would still be surprised if every member of the New Democratic caucus actually voted in favour of a free trade agreement.
View Charlie Angus Profile
NDP (ON)
View Charlie Angus Profile
2014-09-30 11:12 [p.8019]
Mr. Speaker, I want to follow up on my colleague's concerns about reciprocity in the auto sector. Coming from Ontario, the auto industry has been a huge player in the Ontario economy and we have heard a great deal of concern expressed about the lack of reciprocity when we deal with other markets, especially the emerging car markets.
My question for my hon. colleague is about the protections that have been negotiated to ensure we maintain a strong and vital car industry in Canada, as well as being able to trade into markets like Korea. I would like to hear my hon. colleague's concerns on this issue.
View Kennedy Stewart Profile
NDP (BC)
View Kennedy Stewart Profile
2014-09-30 11:13 [p.8019]
Mr. Speaker, again, I appreciate the great work my colleague does in his riding and in the House. We have some concerns about the impact on the auto industry, but where we should start is the lack of effort on the other side of the House to support our automakers. The industry has essentially been abandoned by the Conservatives. On this side of the House, we have done our best to protect it, and that is where things have to start.
Again, there are clauses built into the agreement to protect our auto industry still and we will monitor those as they go along. I share my friend's concerns, but wish the government would actually do more to encourage and boost the auto industry in Canada.
View Marc-André Morin Profile
NDP (QC)
View Marc-André Morin Profile
2014-09-30 11:14 [p.8019]
Mr. Speaker, I would like to ask my colleague if he agrees with me on that. I get the sense that the potential problems the auto industry could face have more to do with the Canadian government's lack of a strategy for the industry than with possible competition.
Korea has overcome absolutely extreme difficulties. Its economy was based on subcontracting: it manufactured low-end vehicles for competitors. However, it invested heavily in research and development and achieved a level of excellence that makes it competitive. Why do we not do the same thing here?
View Robert Aubin Profile
NDP (QC)
View Robert Aubin Profile
2014-09-30 11:15 [p.8019]
Mr. Speaker, I am tremendously pleased to rise this morning to express my point of view on the free trade agreement with South Korea. I very humbly but very fervently hope to dispel or shatter the false impression that the New Democratic Party is a party opposed to free trade agreements.
Unlike the other opposition party, the NDP understands that people think we should take the time to thoroughly analyze an agreement before deciding where we stand on it. That way, we can provide crystal clear explanations of why we support it, what its weak points are and what can be improved.
We take this thorough approach to studying these files and figuring out the real benefit to Canadians, whether they are workers or business people, because of the analytical ability and experience of our leader, the member for Outremont. He is very capable of sharing his analytical ability and his experience with the whole caucus, and I believe that makes us all better analysts.
Getting back to the free trade agreement with South Korea, one of the key principles around trade policy is the diversification of export markets. The slowdown in demand from the United States in 2008 made each and every one of us realize the risks involved in concentrating all of our exports and investments in just one market.
The vagaries of current economic conditions are pushing us to gradually reduce our trade dependence on the United States. Supporting the measures set out in Bill C-41 is therefore crucial. However, we must not forget to use our critical thinking skills when it comes to certain controversial measures in the bill, notably the investor state dispute settlement mechanism.
It is important to bear in mind that NDP support for free trade agreements depends as much on democratic criteria as it does on criteria related to Canada's economic interests.
In fact, those criteria must be analyzed together when we assess the social and economic effectiveness of a free trade agreement. It would be completely absurd and counterproductive, for instance, to sacrifice respect for labour and environmental standards on the altar of economic effectiveness.
Accordingly, we support the implementation of this free trade agreement, especially given that South Korea represents a successful model, both politically and economically. Moving from a dictatorship to civilian rule, the Korean political system has proven its openness to civil society by allowing freedom of expression and promoting a multi-party system. The Korean political system rests on a vibrant trade union movement that is working to provide social protection for workers by guaranteeing labour standards comparable to ours here in Canada and offering relatively high wages.
The South Korean government's budget for 2014 includes a significant increase in spending on improving that country's social safety net and support for local communities. In economic terms, South Korea has a diverse industrial base, bolstered by high public spending on research and development, to the tune of 4% of GDP. Canada can learn something from the Koreans in that regard, since Canada is far less involved in research and development. A top-notch education system supports the efforts by the government to strengthen the industrial fabric.
These criteria are vitally important. Other countries offer attractive economic opportunities for Canada, but the absence of democracy, minimal social protection and transparency makes their political system completely unpredictable and therefore naturally detrimental to trade and investment. Accordingly, having South Korea as a preferred trade partner is a good choice on many levels.
South Korea is Canada's seventh-largest trade partner, with Canadian exports to South Korea worth $3.7 billion.
It is interesting to see that the Canadian and Korean sectors that will benefit from this free trade agreement are complementary markets rather than competing markets. There is a high demand for raw materials in South Korea, while Canada has a limited ability to export its energy resources. The free trade agreement will create a market for Canada's energy resources, thereby creating jobs in the energy sector in Canada. This is an important part of the NDP's analysis of each free trade agreement: looking at how it will improve the everyday lives of Canadians, no matter which province they live in.
What is more, with regard to Korea's social and environmental standards, Canada's economic sectors will not fall prey to social and fiscal dumping measures, and neither will the social safety net that our workforce enjoys.
Korea has also worked on improving its corporate governance. Some groups broke up or restructured in the wake of the Asian crisis in order to rebuild on a more solid financial and management foundation. Korea has an economic profile that is highly favourable to us. Rating agencies have assigned Korea an A2 risk rating. In other words, its political, social and economic situation is conducive to business and long-term investment.
Of course, Bill C-41 will allow us to win back the market shares lost to our American and European competitors, whose countries have already ratified free trade agreements with Korea. This has had a negative impact on the Canadian aerospace industry, whose exports to Korea have dropped by 80%.
I would also like to point out that free trade agreements rarely obtain the consensus and support of all of the economic sectors involved. I am thinking here of the Canadian automobile industry's concerns about this free trade agreement. In reality, it is up to the government to support the automobile industry's growth. The evolution of this industry strongly depends on the growth recorded in countries such as China and Korea. The same could be said for the forestry industry, which specifically affects Quebec and the riding and region that I have the pleasure of representing.
However, Bill C-41 provides for a dispute resolution mechanism that promotes the export of Canadian automobiles to Korea, and includes transitional safeguards if there is a sudden increase in imports affecting the Canadian automobile industry.
Finally, let us look at the unfortunate investor state dispute settlement mechanism included in this bill. It is a regressive and undemocratic measure. Under this mechanism, private companies could take legal action against the Canadian government if the government were to pass legislation that would reduce the future profits of those private companies or investors.
With such a mechanism in place, private companies would have the ability to undermine Canadian health policies, social policies and financial regulation policies by suing for damages in courts outside Canada's jurisdiction. What is more, the investor state case law shows that the courts more often find in favour of investors, calling into question the sovereignty of states over their own jurisdictions. An NDP government would repeal this provision, which is opposed by the main opposition party in South Korea. We have found some kindred spirits there.
The free trade agreement between Canada and Korea provides a momentous opportunity to diversify the Canadian economy and promote the creation of quality jobs in Canada. Some of the terms of the agreement are not what an NDP government would have negotiated. However, a cost-benefit analysis shows that the advantages outweigh the risks involved.
A critical examination of free trade agreements can be vital since such agreements can undermine local producers and entire sectors of the economy that were once thriving. Nevertheless, it will allow Canada to gain market shares in an area of the world where economic growth has not yet reached its full potential.
View Erin O'Toole Profile
CPC (ON)
View Erin O'Toole Profile
2014-09-30 11:30 [p.8021]
Mr. Speaker, it is my honour to stand today in the House to speak to the Canada-Korea free trade agreement. I am proud of the work done by our Prime Minister, our Minister of International Trade, and truly our government in growing new markets for Canadian employers, because one in five jobs is directly attributable to trade. It is an honour for me to talk about yet another important trade agreement that this government has brought to Canadians and to Canadian exporters.
I am also going to use some of my remarks today to talk about why I am very proud of this agreement in particular, as a Canadian and as the member of Parliament for Durham, for bringing together two peoples who have a deep and rich shared history, although it is only about 70 years long in duration. Our relationship was forged in the battles of the Korean War and has emerged as an important relationship for Canada and Asia. I will dedicate a few remarks to that aspect of the relationship.
Trade promotes dialogue between nations, and it also promotes security. The deals we are negotiating are not just huge wins for Canadian employers, but they are also huge wins on international security and helping make sure that globalization allows all people to benefit. The result will be a mutual dependence between countries on the trade and commerce front and more stability and security for their citizens, particularly in Asia.
This is truly yet another incredible free trade agreement negotiated by our government. The Korean GDP is $1.3 trillion. Korea's economy is the 15th largest in the world and it has roared into that position in the last few decades. It is already Canada's seventh-largest trading partner, which is an important point that we focused on. It is a market of 50 million people, and increasingly, a market that is seeing a middle class emerge in the country, and with that middle class comes the demand for quality of products, particularly food and agricultural products, from a country like Canada. People want to provide the best food in the world for their families, and we are seeing that in Asia, particularly in South Korea.
We are following a pattern of engagement to make sure we also keep the playing field level with our main competitors in global commerce. The European Union negotiated a free trade agreement with South Korea in 2011. The United States negotiated a free trade agreement with South Korea in 2012. We have been at the table pretty much alongside our friends and competitors from Australia. We want to make sure our exporters have a level playing field and the opportunity to grow in an important market. Since the U.S. free trade agreement with Korea came into force, we have seen a reduction of $1.5 billion in exports to South Korea because of the tariff elimination that some of our competitors saw.
We were still able to forge a great deal. We do not rush and make a poor deal on behalf of our exporters. We make sure we stay at the table to negotiate an ambitious and important outcome, and that is where we are at.
A review of this free trade agreement has led to estimates that our exports to South Korea would increase upon implementation of this deal by 32%. That is almost a $2 billion addition to our gross domestic product. When fully implemented, the agreement would remove duties on 98% of tariff lines.
I will go back to what I said at the beginning of my remarks. One in every five Canadian jobs is attributable to trade. Deals like this not only secure those jobs that are there now, but they grow more, because as a modest country in the 33 million to 35 million range, we need to sell beyond our borders.
I would remind the House, particularly people who are just waking up to the benefits of trade such as my friends in the NDP, it is Conservative governments that have granted Canadian exporters access to 98% of the markets that are available to Canadian exporters. Pretty much every trade deal or all of that access is attributable to this government and the last Conservative government. That is a fact that as a free trader I am very proud of. Our exporters, once given a level playing field, can compete with the best. Those are the opportunities, an almost $2 billion addition to our GDP from this deal.
What are the big winners? As parliamentary secretary, I have had the good fortune of visiting parts of this country to talk trade, to talk this agreement and to help industries consider market access to take advantage of these agreements. The big winners are all regions of the country because of their particular products, and I will run through those, but also our agricultural sector. In the years of our best friend and trading partner to the south playing games on the trade front with country-of-origin labelling and things like this, our beef and pork producers needed secure access to a growing market. Korea is big beef- and pork-consuming market. It is only going to grow more. The Koreans want access to high-value, high-quality products, yet we could not get in there.
First, there were regulatory issues that we had to smooth out, but also a tariff rate of up to 72% on beef and beef products. Adding 72% to the cost means we cannot access that market; it is as simple as that. Pork and pork products had a 30% tariff rate with most pork products and processed pork products. The tariff walls that Canada has had in reverse on some South Korean products are trivial in comparison. We are talking about 4% or 5% nominal tariffs that an efficient business can perhaps absorb. We cannot absorb a 30% or 72% tariff rate, so those markets are essentially not accessible. Now they will be.
Another huge winner is a part of the country that is dear to my heart. Atlantic Canada will have immense wins with this deal, and British Columbia as well and potentially the Arctic. Seafood tariffs were another one of those high-tariff ranges, ranging from 16% to 47% tariff rates. That is essentially a tariff wall.
I had the honour of being in Korea a few a weeks ago, and I will speak to that in my remarks shortly. We were there a few days before the beginning of Chuseok, which is the Korean thanksgiving celebration. The Koreans were happy to tell us about this and we were talking about the differences between our Thanksgiving and theirs. Theirs is more of an ancestral history event where they go back to the town where they grew up, and it is a point of honour for them to bring a special food to their ancestral home and their family at Chuseok. The most popular food in the last year to two years was Atlantic Canadian lobster. That is a product that already had a 20% tariff rate, yet people were recognizing that the best lobster in the world comes from Atlantic Canada and they were still absorbing that 20% hit. That is going to be eliminated.
I was also fortunate to be at the Halifax Stanfield International Airport some months ago to meet with Korean airlines officials as they sent their second of many dedicated cargo flights to Halifax to take Atlantic lobster back to South Korea, where most was consumed in South Korea or traded in Asia. That is a market we have already been forging, and it will only benefit more from this deal.
Wood and wood products, another major export for us, had tariffs in the 5% range on most wood products and 10% on processed wood products. I have seen first-hand Viceroy Homes, which employs people in both Port Hope, Ontario, and in Burnaby, B.C., a Unifor unionized workplace that has predicted it will double the size of its workforce as a result of South Korea alone. It already had market access as a high-value wood-product company of windows and homes. With the reduction of the 10% tariff, it is now very competitive and it is hiring Canadians because of that.
In Newfoundland and Labrador, frozen shrimp and a lot of crab products have a 20% tariff wall. In Nova Scotia, known for its blueberries, there is a 45% tariff on fresh and 30% on frozen. In Prince Edward Island and New Brunswick, parts of our country known for potatoes and processed potato products, such as french fries, of which I perhaps have had a few too many from time to time, there is an 18% tariff rate, making it hard to be competitive in that market.
In Quebec, maple syrup has an 8% tariff. As for flight simulators, CAE is a company I visited while I was in South Korea to see its investments in that country. On flight simulators there is a 5% tariff rate that will come down. In Ontario, aerospace and rail has an 8% tariff. On nickel products and a lot of refined metal products, there is an 8% tariff. In Manitoba, chemicals have an 8% tariff. On pork, as I said earlier, there is a 30% tariff. I toured the Maple Leaf site in Brandon, which is waiting for access to South Korea. It has made the investments and is ready to do it. It just needs the markets that we are now opening up.
In Saskatchewan, canola oil has a 5% tariff. One of the craziest ones is unroasted barley malt, which has a 269% tariff rate. That is a wall. That is a tariff cage, I would suggest. In Alberta, industrial machinery is at an 18% tariff rate. Once again, Alberta beef, which we just enjoyed here in Ottawa last week, has a 72% tariff rate. We cannot access those markets. In B.C., of course, which has a robust, diverse economy but is also known for its wine, wine has a 15% tariff rate. I know my friend, the MP for Kelowna—Lake Country, is quite keen to see access to that market increase.
This is our first free trade agreement in Asia. As I said at the outset of my remarks, the cultural and historical bonds between the countries make this a perfect partner for our first FTA in Asia because its dynamic economy, which is now the 15th largest in the world, with brand names we all recognize, that opportunity and freedom was secured by Canadians.
There were 26,000 of our young men and women who served in the Korean War from 1950 to 1953, and 516 gave the ultimate sacrifice. When I was in South Korea last month, I was amazed. From schoolchildren to ministers of the government, every one of them thanked us for that commitment 60 years ago. That is the foundation upon which our relations are built. This is a lovely evolution to that relationship now, that we will drop our tariff walls and fully trade as partners.
Many of us took part in the PPCLI, Princess Patricia's Canadian Light Infantry's 100th anniversary just last week on the Hill. There was a wonderful parade, joined by the Van Doos, another proud regiment also celebrating its century. That regiment distinguished itself on the battlefields of South Korea.
In the battle of Kapyong, the PPCLI was one of the few units, the only Canadian unit, to receive a presidential unit citation because its bravery over the course of several days, repelling a communist Chinese advance and saving the lives of Americans, New Zealanders, Australians, and Koreans. They were surrounded. They called in fire on Hill 677, their own position, to make sure they held that line. That is the Canadian commitment to countries such as South Korea and that is why I was so touched to see that first-hand in Seoul.
I also had the honour of joining Minister Park, Korea's Minister of Patriots and Veterans Affairs, at the national war monument and national hall of honour, where our delegation, which included the MP for Haliburton—Kawartha Lakes—Brock and Senator Yonah Martin from British Columbia, laid wreaths at the hall of honour and at the 60th anniversary marker that our government erected when we tried to make sure that our veterans from the Korean War do not think of it as the forgotten war anymore. We have been trying to show them how much we appreciate them. Minister Park laid those wreaths with us and spoke with fondness of the Korean War veterans from Canada he has met over the years.
In the hall of honour and in the war museum, we got to see the spectacular artwork of Canadian war artist Ted Zuber. It was really Korean veterans themselves who raised a lot of the money to hang that spectacular painting by a Canadian artist, a war artist who, incidentally, served in the Royal Canadian Regiment. Now I have named all three of our regiments. His work depicting our service and sacrifice in South Korea is stunning and sits in a place of honour in that war museum.
On a personal level, in Durham, my friend who lives quite close to me, Doug Finney, is currently the president of the Korean Veterans Association of Canada representing those veterans in Canada. I was honoured that he was able to join our government, the Prime Minister and the Governor General at a state dinner just last week at Rideau Hall honouring the visit of President Park from South Korea, the night before the historic signing ceremony for this trade agreement.
We are forged in the history of war and of conflict, but what has emerged is a robust, strong democracy in Asia that is now our gateway into a fast and growing part of the world.
The Koreans I met were truly inspiring. Our first evening in Korea we met with children from H2O Pumassi, who had just two months earlier visited Canada to come and thank our veterans. In fact, in solemn ceremonies, they even washed the feet of some of our veterans. These are children whose parents may not have even born when the conflict took place. Their deep remembrance of our sacrifice is palpable and moving for us. That was our first dinner. They hosted us to show us photos of their trip to Canada. It was truly inspiring.
Many Korean Canadians came here for opportunity, have done well and are now trying to help out back in their home country. Mr. Ron Suh was on the ground in Seoul and joined us for some of the events. He has been working to build bridges for decades as the regional president of the National Unification Advisory Council. It is a position that the president of South Korea asked Ron to fill so that he could work as part of the diaspora toward unification, which is something I think all of us would like to see to eliminate some of the horrors of oppression in North Korea. People who have been building these person-to-person ties between our countries since the war are inspiring.
Similarly, there are South Korean veterans who fought in the war and then immigrated to Canada afterward. They have an association and I have been very fortunate to meet some of these veterans in my travels across the country. They are the living embodiment of the bridge between our countries.
Our work in the national assembly during that visit was to make sure that our friends in South Korea ratified the deal on their side quickly, as we will in the House. I have to thank Minister Park and Minister of Education Hwang; Representative Chung, the speaker of the national assembly who met with us and hosted a meeting; Representative Kim and the trade committee, who we met with us directly to ensure quick passage of this free trade agreement.
We also met with members of their opposition to make sure that events in their country at their national assembly and other things did not interfere with the passage of this important new evolution of our relationship as countries. We met with Representative Woo, the policy chair for the opposition coalition, NPAD.
I thank all of those representatives for the meeting and for helping forge the bonds between our countries.
Durham is an area with a history of a strong and productive auto industry with General Motors in Oshawa. My father is a GM retiree. As the member of Parliament for Durham, I am happy to say that our government has secured an outcome on automobiles that is as strong or stronger than some of the provisions our U.S. friends have. Not only do we get immediate duty-free access to those markets, but we have a permanent specialized dispute settlement procedure for non-tariff barriers.
This is not a five-year dispute settlement such that the U.S. secured in its agreement. We have a permanent dispute resolution so that we can make sure that our automakers have access.
An important point that some of my friends in the opposition like to ignore is that the decision on what vehicle rolls off the lines for our great and productive workforces in Oshawa, Oakville and Windsor is not made at the Canadian subsidiary. That decision is made in Detroit.
How could our government possibly allow our country and those plants to have one less market that they could access? How could we possibly do that? I said to Unifor and representatives of one of the big three that it would be against our national interest. We want to make sure our plants, which are some of the most efficient in North America, have the same market access as their counterparts in the U.S. because they compete for new products to roll off their lines.
I hope that, with my remarks today, I have shown why South Korea is our partner in Asia with our first free trade agreement there. It is a relationship forged in sacrifice, service, and mutual respect. This agreement would be a tremendous win for both countries.
View Charlie Angus Profile
NDP (ON)
View Charlie Angus Profile
2014-09-30 12:59 [p.8033]
Mr. Speaker, certainly in Ontario one of the concerns has always been the lack of reciprocity in the auto markets. Our automakers are a powerful force in the economy here in Canada. We receive competition from the Asian markets, but we have seen in the past a real reluctance to allow us to export a fair share into their markets. We have seen all manner of blocks put up. Meanwhile, we certainly have dealt with a wide array of Asian vehicles coming into Canada.
I would like to ask my hon. colleague what provisions made it possible for us to get access to the Korean market, which has not been the most open in terms of access for automobiles from Canada?
View Colin Mayes Profile
CPC (BC)
View Colin Mayes Profile
2014-09-30 13:00 [p.8033]
Mr. Speaker, as we go into a free trade agreement with any country, we make sure that those barriers are eliminated and that there is market access.
As we have stated, in the agreement we have an easier mechanism to sort out any challenges that we would see as barriers. I believe we have to have a certain amount of faith in the agreement and have faith that those we are signing an agreement with are going to uphold those values.
The purpose of the agreement is to open up markets to both countries, and I have full confidence that Korea will give Canadian companies access to their market.
View Massimo Pacetti Profile
Ind. (QC)
Mr. Speaker, I am very pleased to rise in the House today to debate Bill C-41 on the Canada-Korea free trade agreement.
The Liberal Party and I support the initiatives that lead to free trade agreements. There are definitely many advantages to free trade agreements, and it goes without saying that Canada's economy gains strength when markets are opened. That is why we will support the bill to establish a partnership between South Korea and Canada.
We believe that it is important to establish a special relationship with South Korea, since we do more than $10.8 billion of bilateral merchandise trade with this country. Furthermore, South Korea already has free trade agreements with the European Union and the United States, which is an incentive for us to act quickly. We are now playing catch-up. We could end up at a serious disadvantage if we delay an agreement with South Korea even further.
Canada already lost more than 30% of its share of the South Korean market when South Korea signed agreements with the United States, the European Union and Australia. Since negotiations have been going on for nearly 10 years, we sincerely hope that this agreement will take effect quickly. Strategically, we are lagging far behind on markets we should already have access to.
This is the first free trade agreement that establishes an agreement with an Asian country, yet our primary trading countries are Asian countries, including Japan, China and Korea. The government is lacking a clear vision when it comes time to targeting new markets or quickly carving out a space in emerging markets.
The government boasts about signing free trade agreements, as we saw with the last member who spoke, but we have had some significant trade deficits since 2009. The announcement of a free trade agreement with South Korea will not magically fix that situation, as the Conservative government hopes. We think that the government needs to commit resources and make investments to increase trade.
For example, since the free trade agreement between South Korea and the United States was established, Canadian pork producers have lost the Korean market to the United States. This situation is unacceptable. We should have acted much more quickly before these kinds of things happened. Now that the agreement has been signed, this government has the duty to protect these industries and ensure that they regain their market share.
As the Liberal critic for small business, I am aware of the importance of this agreement for Canadian workers. Removing tariffs is often the support small and medium businesses want, to ensure that they have an equal chance of being competitive on the markets. The agreement can only help Canadian companies doing business with South Korea and the many subcontractors involved.
This agreement is even more beneficial when you take into account that the customs tariffs imposed by South Korea are about three times higher than Canada's, and they will be eliminated, on different schedules, once the agreement is in effect. These are small things that will matter a lot at the end of the year for Canadian small and medium-sized businesses.
I am pleased to hear the news for Canadian entrepreneurs who do business with South Korea, but I hope it is not too late for those who would like to enter the Korean market. Indeed, the various competitors from other countries have already become well-established since the signing of free trade agreements that preceded ours.
From another perspective, what concerns me about the free trade agreement between Canada and South Korea is the current situation with the Canadian automobile industry and what will happen once this agreement is implemented. The Canadian and North American auto market has already been significantly infiltrated by Korean vehicles.
About 100,000 Korean vehicles worth $2.6 billion are imported into Canada annually, while Canadian or North American vehicles do not really reach the Korean market. One hundred or so Canadian vehicles worth about $12.5 million are exported annually to South Korea.
Objectively speaking, it would be wrong to believe that free trade will create a balance. The government is really turning its back on the auto industry under this agreement.
In the final agreement summary, only South Korean imports from Canada are mentioned. There is no mention of Canadian imports from South Korea. We can therefore neither compare nor see the scale of the imbalance.
The government has gotten us used to that kind of thing: hiding important information to make it easier to pass bills that might be controversial. My concern is that the gap will only grow wider.
According to Unifor, Canadian auto sector imports from South Korea have increased by 1,010% since 1997. In that sector, the benefits are exclusively South Korea's. A greater number of Korean cars will enter the Canadian market, and it will get harder and harder to compete.
Another important and interesting aspect of the bill we are debating today is that it would not change anything in terms of intellectual property. Since becoming a member of the Standing Committee on International Trade, I have seen how big a global issue this has become. There are increasing demands to improve intellectual property protection, and there is a lot of pressure around that in various agreements.
From negotiations with the European Union to creating a trans-Pacific partnership, there is always disagreement about intellectual property. The surprising thing is that when a country complies with international intellectual property protection standards, a negotiating partner can ask it to do even more than the good things it is already doing, can expect all the parties to an agreement to use the same system. I am surprised but pleased to see that a free trade agreement that respects each country's system can happen.
Will the government be able to respect and protect our own Canadian standards as it negotiates agreements with the European Union and the countries working on a trans-Pacific partnership? It is difficult to tell at the moment, but our preliminary information suggests that the European Union's high expectations regarding intellectual property seem to be finding their way into the final agreement.
Over the course of the committee meetings, we repeatedly heard concerns about increased protection for intellectual property from representatives of various fields, including the pharmaceutical field.
Just this week, since the text of the final Canada-EU agreement was released, Canadians have already expressed concern about the potential increase in costs for drugs, as well as the possibility of higher costs in our health care system. I sincerely hope that their concerns will be taken seriously by this government.
To get back to the bill being debated today, I wish to support it so that it can be sent to committee for further study. I hope that we will have the viewpoints of all the sectors and stakeholders of society in the testimony at committee.
I hope that this agreement will not add significantly to the imbalance we can see in the automotive sector or that the government will at least keep an eye on the health of the Canadian sector.
I also hope that this agreement will help Canadian businesses by fostering more and more trade between the two countries. I think the elimination of trade barriers can only benefit the majority of Canadian businesses.
As I said before, such agreements have significant repercussions on local entrepreneurs. In fact, customs tariffs alone can account for many unnecessary direct and indirect expenses for small businesses.
View Alexandre Boulerice Profile
NDP (QC)
Mr. Speaker, I think that what my Conservative Party colleague fails to understand is that we are voting in favour of a free trade agreement with South Korea. I do not see what there is to criticize about that.
However, I have a question for him about something concerning at least 100,000 workers with well-paid jobs in Canada. The concern has to do with the automotive sector and Korean cars. We want to know what is the government's plan for protecting the car manufacturing sector in Canada and for supporting these jobs in light of the Korean competition. What does the hon. member's government propose for defending Canadian jobs?
View Alexandre Boulerice Profile
NDP (QC)
Mr. Speaker, the NDP does not usually rise in the House in support of a trade agreement, a free trade agreement with another country. In the past, we have been rather skeptical. We are still skeptical, because we are critical thinkers and we want trade agreements to benefit our economic sectors and workers, and to protect and defend our jobs. That being said, we are also aware that we must diversify our exports.
Canada and Quebec have always been nations of traders. Ever since we traded with the aboriginal peoples when we arrived, traded furs and dealt with our neighbours to the south, the Americans, we have always worked in production and commerce. We know that this is part of our economic and social fabric and that, today, we need to provide our goods and services to the whole world in order to keep thousands of jobs in the country and to sell our products, be it in Africa, Japan, Europe or China. We are aware that this is key to the economic well-being of our workers in all our economic sectors. However, we must consider and assess each trade agreement on its own merits and what we will or will not gain from it. We must ask ourselves certain questions every time we sign a treaty with another country.
The NDP determined that the trade agreement with South Korea had more advantages than disadvantages for many economic sectors. I will come back to that, but I must say first and foremost that we conducted a careful study to assess the benefits, the losses, the costs and the profits. I would like to point out that, unlike the Liberal Party, which gives the government a blank cheque by voting in favour of any free trade agreement without considering its contents, we think that we must do some serious work and determine whether it is truly advantageous for our businesses and the workers they employ. There are some very interesting things in South Korea's case.
We believe that we should always ask ourselves three questions before signing a treaty. For the most part, the Conservatives have botched these negotiations, which are not always to our advantage. That is why we have opposed these agreements many times in the past. In some cases, it was because we came out on the losing end; in others, it was because we were signing agreements with governments that had abysmal human rights records. Sometimes, the governments were linked to crime or there were politically motivated murders of union activists. For example, we were very concerned about the Conservatives' free trade agreement with Honduras, which we refused to support.
Question number one: Does the proposed partner respect democracy and human rights, and does it have adequate environmental and labour standards?
Question number two: Is the economy of the proposed partner of significant or strategic value to Canada and our exporters? We are a nation of traders, therefore exporters, and we are trying to diversify our exports. Opening up a new market can be a very attractive prospect, but does it have a significant strategic value?
As they say, the devil is in the details. The third question is the following: Are the terms of the proposed agreement satisfactory?
According to the NDP's assessment, the trade agreement with South Korea is positive and satisfactory overall. Why?
I have been involved with unions and the defence of public services. I believe that protecting our public services and procurement for various levels of government is vital when governments have to make purchases or provide services. In the proposed agreement with South Korea, there is absolutely nothing that affects procurement for various levels of government.
Our public services are not at all affected by any aspect of this trade agreement. It really affects only the private sector. That is very important to me and to the people I represent. The agreement proposed today does not pose any threat regarding the privatization of public services, but we have serious doubts about the proposed agreement with the European Union. We still have not been given any details or seen the text of the agreement.
This is a fundamental value for me and for many progressives and social democrats. Some safeguards are in place in the private sector. Agricultural production, a supply-managed industry, is not subject to this agreement. That is good news for most producers and farmers in Quebec and Canada, and we are very pleased about that.
First, this agreement does not privatize anything or attack any public services, which is a good thing. Second, we are concerned about the dispute resolution mechanism as it now stands.
Every trade agreement contains a dispute resolution mechanism for the two partners, in case a company deems that it has been treated unfairly with regard to its investments or its production capacity, for example.
One of the mechanisms in this agreement is not what the NDP or the main opposition party in South Korea would have negotiated.
It is clear that next year, when the NDP takes office, we will sit down with our South Korean partners and review this dispute resolution mechanism to ensure that companies will not be able to take legal action against a government or a level of government over future loss of profit. This seems undemocratic to us, and we are particularly concerned about it. We want to resolve this issue.
We are able to live with this agreement as it stands because it contains a clause that allows us to terminate our relations or a dispute with six months' notice, unlike the trade agreement with China, which ties our hands and is binding for 31 years. This clause protects us and it protects our workers and businesses in Quebec and Canada.
We can live with this, even if we are concerned about it and it seems undemocratic to us. We want to renegotiate with South Korea when we take office.
Third, we are concerned about support for the automotive sector in this agreement. The agreement has some huge benefits for a number of economic sectors, including the forestry, aerospace, and agriculture sectors, and I think we have everything to gain. This will enable us to increase our exports and sales to South Korea, the 15th biggest economy in the world, which has 50 million inhabitants with purchasing power similar to that of Quebeckers and Canadians. It is a very attractive market in which to sell our products.
However, we also know that this country produces a huge number of automobiles. There are 100,000 good jobs in Canada—not in Quebec anymore—in the automotive sector, and we encourage the Conservative government to adopt measures that will support the jobs in Canada's automotive industry.
We do not think that the existing 6% tariff really protected us from exports coming from South Korea, especially since they had plants in the United States, and later Mexico, so that 6% tariff did not exist.
However, we are concerned about the potential increase in the number of South Korean cars coming into the country. We would like the government to be more proactive about protecting and defending the automotive industry to protect these good jobs.
I remind members that this agreement will help our farmers and our aerospace companies, such as Bombardier, which is why the NDP will support it.
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