Thank you, Mr. Chair.
It is a great pleasure to be here with you today to discuss this topic.
The Forest Products Association of Canada is the national trade association that represents Canada's integrated pulp, paper, and lumber producers. The industry at large represents about 12% of Canada's manufacturing GDP. We directly employ 240,000 Canadians across the country and another 500,000 or so indirectly.
We are found in pretty much 200 communities across the country. When I say we're “in” those communities, I mean we are the economic lifeblood of many of those communities, keeping the towns running and keeping the jobs in the communities.
For many of you around this table, we've had numerous discussions over the years. Many of your constituencies are no strangers to the industry and certainly to the trials and tribulations we've gone through in the most recent economic downturn. Obviously many jobs have been shed in the sector. Many of you have felt the impact directly in your constituencies over the past couple of years.
I'd like to say that we're coming out of the economic unrest, but it looks like there's still some more uncertainty ahead. I am pleased to report, however, that the industry has taken some steps during the most recent economic downturn to better prepare itself to come out of the next economic malaise a little bit better prepared.
We've certainly undertaken progress on a number of fronts. We've improved our competitiveness and our productivity. We've looked to diversify our product stream. We're getting into the bioeconomy in a more fulsome fashion. We're adding that to our existing lumber, pulp, and paper production and trying to extract more value out of each and every tree.
The other two key parts of our transformational strategy include market diversification and leveraging our environmental reputation abroad. I think those last two components are integral to the Canada-European free trade agreement that we're going to discuss today.
Our industry is a significant exporter. We export well over 50% of our product, about $26 billion a year, to markets outside of Canada. We are one of Canada's largest exporting industries. We're also one of the most successful forest products exporting industries in the world.
Our primary market is, of course, the U.S. marketplace, where about 65% of our product goes. We send another 30% or so of our product to Asia, and certainly are looking at China as an increasingly important part of our product mix. The EU represents about another 5% of our market share. Various markets elsewhere around the world make up the remainder.
The government has been extremely supportive of the industry in terms of diversifying its marketplace in a number of ways. One is direct support for market development and market expansion in other parts of the world. Particularly if you look at China, the government has supported a lot of our development of that market. Ministers Oliver and Fast were recently over there doing some significant work in terms of outreach to their government. Much of this is government to government, so that's enormously helpful.
The second aspect of the government support that's been very useful for the industry in developing new marketplaces and diversifying our markets has been through free trade deals such as the one we're discussing today. I've been before this committee to discuss the Jordanian deal, the Panamanian deal, and also the Colombian deal, all of which are significantly smaller than this one but nonetheless help to diversify our marketplace. For that reason, we are very supportive of the deal we're talking about today, the deal with the EU.
To give you a sense of it, the EU imports from countries outside of the EU family about $23 billion worth of product annually. We ship about $1.5 billion worth of product to the EU. You can divide it almost into thirds: pulp, paper, and then wood products.
Our pulp and paper goes into that marketplace relatively tariff-free, but we do face a 7% tariff on our OSBs, the oriented strand boards, and plywood products going into that marketplace, which essentially renders our industry uncompetitive vis-à-vis our competitors.
On this particular deal, we've been working very closely with officials in the government in structuring the deal. There are two components of it that we're very supportive of. One, of course, is the removal of that 7% duty on our plywood products.
The second part is fairly unique. I don't know whether the committee has actually discussed this to date. We've advocated an annex for forest products procurement with governments. Right now the government procurement process for forest products in the EU is a fairly behind-closed-doors process. We're advocating something that's a little bit more open and that taps into leveraging our environmental pedigree.
The industry has come a long way in terms of its sustainability practices and its harvesting practices. We think that's an advantage in the marketplace. We would like to see that being used in the development of government procurement practices. So an annex to this deal has been written, and we believe it is on the table for discussion at this particular point in time in the next round. We understand that things are progressing smoothly. We're looking forward to seeing the final version of that.
All of that is to say that this is an important deal for us in that it opens up new markets for us. It expands our marketplace and is part of a market diversification plan that this industry has undertaken. We are grateful for the government's support in this regard. I look forward to entertaining questions from the committee after Mr. Pomerleau has provided his testimony.
Thank you, Mr. Chair.