Bill C-41 (Historical)

Canada-Korea Economic Growth and Prosperity Act

An Act to implement the Free Trade Agreement between Canada and the Republic of Korea

This enactment implements the Free Trade Agreement between Canada and the Republic of Korea that was done at Ottawa on September 22, 2014.
The general provisions of the enactment set out rules of interpretation and specify that no recourse may be taken on the basis of sections 9 to 15 or any order made under those sections, or on the basis of the provisions of the Free Trade Agreement, without the consent of the Attorney General of Canada.
Part 1 approves the Free Trade Agreement and provides for the payment by Canada of its share of the expenditures associated with the operation of the institutional aspects of the Agreement and the power of the Governor in Council to make orders for carrying out the provisions of the enactment. Part 1 also provides protection for certain geographical indications.
Part 2 amends existing laws in order to bring them into conformity with Canada’s obligations under the Free Trade Agreement between Canada and the Republic of Korea.
Part 3 contains coordinating amendments and the coming into force provision.

Canada-Korea Economic Growth and Prosperity Act

[Wai Young, Conservative, Vancouver South, BC]

Mr. Speaker, as we know, Canada is a federation of different provinces. Canada will support the Province of Ontario, just as it supports the Province of B.C. in opening up economic offices abroad, just as we have done with different countries. I am sure that with the signing of this agreement, Korea is a target for that.

We look forward to working with the different provinces in expanding our trade into Korea, as well as the Asia Pacific region.

[The Acting Speaker, Conservative, Bruce Stanton]

Before resuming debate, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Thunder Bay—Superior North, The Environment; the hon. member for Algoma—Manitoulin—Kapuskasing, Health; the hon. member for Saanich—Gulf Islands, Natural Resources.

Resuming debate, the hon. member for Beaches—East York.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, it gives me great pleasure to rise today in the House and speak to Bill C-41. The government's trade agenda has provoked widespread public concern. Representing the views of so many Canadians, we have opposed to date all of the trade agreements negotiated by the government, save one.

Of these deals, the one with the greatest consequence to our economic future, and indeed our political future, has been the China FIPA. With respect to the China FIPA, business columnist and editor Diane Francis has said that the Conservative government demonstrated “the worst negotiating skills since Neville Chamberlain”.

Most recently, on CBC Radio, she said that trade deals are either “fair and reciprocal” or result in “colonization and hollowing out”. Francis concludes that the China FIPA is decidedly not reciprocal.

Of course, the NDP is waiting to see what CETA actually says. No breath is being held, however, in light of the unfortunate precedents set at the bargaining table by the government and its tendency to conflate increasing trade with expanding corporate rights and diminishing democratic rights and sovereignty, through the inclusion of investor state dispute settlement mechanisms.

It will be well understood by now that the Korea deal also includes an investor state dispute settlement mechanism. Certainly, an NDP government would not have included such a mechanism, were we responsible for negotiating this deal. It should be noted that Korea's main opposition party also opposes the inclusion of such a mechanism.

However, this is not the China FIPA deal, nor is it what we have seen of CETA as of yet. There are significant distinctions to be made here. The Korea deal is fully cancellable or renegotiable on six months' notice, unlike the China FIPA deal, which locks us in for a minimum of 15 years. This agreement has guaranteed transparency rules for ISDS tribunals, and hearings must be held in public. The agreement does not apply to provincial, territorial, or municipal procurement or crown corporations. Shipbuilding is, notably, exempt from federal procurement rules. The agreement does not apply to or negatively affect supply managed agricultural products. Finally, the agreement does not contain any negative intellectual property provision. I am happy to say that we are able to distinguish the agreement before us today from those that have come before it.

The outstanding question, of course, is this. What is there to recommend this deal? We believe the agreement will have a net benefit for Canada's economy and Canadian workers. That assessment is made by employing essentially three criteria. First, is the proposed partner one who respects democracy, human rights, adequate environmental and labour standards, and Canadian values? Second, is the proposed partner's economy of significant or strategic value to Canada? Third, are the terms of the proposed deal satisfactory?

With respect to the first of these, Korea has a robust multi-party system of democratic rule, an active trade union movement, and a diverse civil society. South Korea is a developed country ranking 15th on the human development index.

On the matter of the Korean economy and its strategic economic value to Canada, Korea is a member of the G20, it has the 15th-largest GDP globally, and it is our 7th-largest trading partner. However, it is worth noting that we are on the losing end of this trading relationship currently, with a trade balance deficit of about $4 billion and growing. It is unfortunate but important to note that, in the nine years that successive Liberal and Conservative governments took to negotiate this deal, Korea has moved forward with a free trade agreement with the European Union in 2011 and with the United States in 2012, and further free trade agreements are pending.

As a result, the market share of Canadian companies in Korea has dropped 30% since the full implementation of its free trade agreement with the United States. The losses have been particularly heavy in the agri-food, seafood, and aerospace industries. The Canadian agri-food business, which is a key economic sector here in Canada, responsible for 1 in 8 or 2.1 million jobs, was hit particularly hard.

Similarly, the Canadian aerospace industry was hit hard. Exports to Korea dropped by 80% from $180 million to roughly $35 million in the last couple of years alone.

It is well past time to ensure that Canadian companies and workers can take advantage of a fair, reciprocal, and freer trading relationship with South Korea. That is why we see, almost without exception, Canadian business representatives and Canadian labour across all sectors of the economy in support of the deal.

There is a notable exception: segments of the auto sector. They are important segments in the form of the Ford Motor Company and the union Unifor, in particular, which have withheld their support for this agreement. There are certainly positive provisions in the agreement for the auto sector, but this is not to suggest that the concerns of Unifor and the Ford Motor Company are unfounded.

It is worth noting that, last year, Canada failed to attract a penny of the $17.6 billion invested globally in the auto sector. It is also worth noting that the United States succeeded in its deal with Korea, where the Conservative government failed. It built stronger protections for domestic auto production into its agreement.

This raises the very important question of what the government is doing to support the auto sector in Canada to ensure that it is in a position to thrive in a globally competitive industry.

The 115,000 auto jobs are important jobs. They are far more important than the number would indicate, because they stand as representative of the kind of jobs that made certain parts of this country, and by extension the whole country, thrive.

In my riding of Beaches—East York, at the corner of Victoria Park and Danforth, there once stood a Ford Motor Company plant. It is where Ford made its Canadian Model Ts and Model As. It became the first Canadian plant of Nash Motors and finally American Motors until it closed down. Now, it sits next to what the City of Toronto calls, because of issues of structural poverty, a “priority neighbourhood”. A strip mall now stands where that auto plant once did.

Just outside the northwest corner of my riding is Toronto's Golden Mile. It was home to significant industrial concerns in the post-war period, including a General Motors van plant. A Globe and Mail article from some years ago probably captured best what became of the Golden Mile. It said:

...the Golden Mile was a golden flame that burned brightly for nearly half a century until it was snuffed out by big-box stores.

Today, it is the Eglinton Town Centre's towering pylon with a checkerboard of retail signage that stands tallest on the once-proud strip.

The Golden Mile mall, significantly, houses a City of Toronto social services office.

While we stand in support of this deal, this is an issue that points to a broader economic context of this agreement. We asked the government what it is doing for urban economies where we see tremendous growth and only growth of precarious employment; where there is a growing level of working poverty; where there are burgeoning, informal economies; where youth unemployment is nearing 20%; where nothing but big-box stores, dollar stores, and social service agencies stand where once stood industry.

It is not about going back. It is about moving forward. I do not see an economic vision coming out of the government, which addresses the economic needs of a vast portion of Canada and Canadians.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, throughout the member's speech I sensed a note of regret that the official opposition is supporting this treaty, given the impact it is likely to have on the car sector within Canada. I have also read through the briefs presented by Unifor and heard its deep concern that this would expand the trade deficit between Canada and Korea, and allow Korean vehicles to flood the Canadian market, while we mostly export more raw materials toward South Korea.

I wonder if the hon. member is a reluctant supporter of this treaty, as his speech tended to suggest. Why would he not join the Greens and vote against it?

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, the member for Saanich—Gulf Islands mistakes my concerns, I am afraid, and I will take responsibility for that.

I stand in support of the agreement. It is qualitatively different from the deals that have come before, that the government has negotiated previously.

However, I think it is worthwhile in the context of having a debate on this issue in the House to raise the important questions that this bill raises. What is the broader economic policy context for this bill? Where is the policy or strategy that reflects the desire to ensure we can compete in terms of innovation, for example? Where is the policy and strategy that ensures all can participate in the economic benefits of this agreement?

What I got from the government is that simply dropping trade barriers seems to be enough for it, and what happens thereafter is somehow magic.

I support the freer trade agreement with South Korea, but it does raise the question for the auto sector and more broadly. What is the broad economic vision for this country? I would point to my neck of the woods, my neighbourhood, where we see the legacy of a strong industrial Canada that is now covered over with big-box stores and dollar stores, and where people are struggling to make a living.

I would ask the government what it is going to do about that.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, my question is relatively simple. Over the past few years, Canada has been losing industrial jobs and exporting its natural resources almost completely unprocessed. When the United States negotiates a trade agreement, it ensures that its industries are protected and it increases the value of its exports by processing them domestically. It provides those industries with investments, support and industrial policies, which we do not do here in Canada.

I would like to know if we could obtain this same economic agreement, supported by a policy of industrialization, which we currently do not have, since this would provide significant and real economic benefits.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, if we are to have a country where prosperity is increasing but is shared more fairly, then we need to have industrial policy to support the free trade agreements we are negotiating.

It is a particular interest and concern to me as the urban affairs critic, thinking about urban economies, because the government does not think about urban economies. What that indicates to me is that, in the absence of that thought, we are not going to grow an innovative economy. Urban economies are fundamentally the place where one grows an economy of innovation.

This is the very point. It is great to have a free trade deal of this nature, but as my colleague from Windsor has raised in his questions this afternoon, there is the issue of an auto strategy and other strategies that Korea has to support its free trade agenda. It has a green technology, green energy strategy that ensures Korea is going to be able to compete globally on those terms. It is 1 of 12 countries around the world that supports its auto industry with a national strategy.

We have none of these things. A trade agenda is great, and we will support dropping trade barriers where we believe it is of advantage to Canada's business and Canadian workers, but the very point of my speech here today is to urge the government to think about having industrial policy to support a trade agenda.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, the Canada–Korea free trade agreement is a landmark achievement that will result in mutual benefits and prosperity for both countries and lay the foundation to unlock the full potential of our political, economic, and security relations.

The most recent Speech from the Throne committed to expanding trade in the Asia–Pacific region to benefit hard-working Canadians and businesses, especially our crucial small and medium-sized enterprises and industries across the country. We are delivering on that commitment with this agreement.

The conclusion of the Canada–Korea free trade agreement negotiations was announced in Seoul by the Prime Minister and South Korean President Park Geun-Hye on March 11, 2014. During the announcement, both leaders demonstrated their strong commitment to raising the overall Canada–Korea partnership to a new level and to entering a new era in our countries' bilateral relations.

The Canada–Korea free trade agreement represents a significant achievement for Canada. It will provide exporters, investors, and service providers with strategic access to a key gateway to the wider Asia–Pacific region and will also provide a level playing field for them and their key foreign competitors from the U.S., the EU, Australia, and other countries that have concluded free trade agreements with South Korea.

In addition, the Canada–Korea free trade agreement is projected to boost Canada's GDP by $1.7 billion and increase Canada's exports to South Korea by over 30%. Canadian workers in sectors across every region of the country stand to benefit from increased access.

This free trade agreement is an ambitious, state-of-the-art agreement covering virtually all sectors and aspects of Canada–Korea trade, including trade in goods and services, investment, government procurement, intellectual property, labour, and environmental co-operation.

It is disappointing to note that during 13 long years in government, the Liberals completely neglected trade, completing only three free trade agreements. The Liberals took Canada virtually out of the game of trade negotiations, putting Canadian workers and businesses at severe risk of falling behind in this era of global markets. Thanks to our government, Canada has reached free trade agreements with an additional 38 countries.

While the Canada–Korea free trade agreement will provide a modern and stable foundation to grow our bilateral relations, it builds on our long history of political and economic co-operation.

Canada and the Republic of Korea established diplomatic relations in 1963. During the Korea War between 1950 and 1953, Canada contributed the third-largest contingent of troops to the United Nations command. Some 26,791 Canadian soldiers served in Korea, of whom 516 died.

As I said earlier today, my cousin was one of those people. Lance Corporal John Howard Fairman, who died on October 13, 1952, was the son of my aunt and uncle, Howard and Blanche Fairman. He grew up in Hastings, Ontario, and volunteered for the Royal Canadian Regiment.

After the Korean War armistice, 7,000 Canadian soldiers served as peacekeepers between 1953 and 1957.

Prior to the establishment of diplomatic bilateral relations, Canada participated in supervising South Korea's first elections in 1948, as part of the United Nations Temporary Commission on Korea. Currently Canada is the only state, other than the United Nations, with permanent military representation at the United Nations Command in Korea. Canada participates in the UNC military armistice commission that supervises the armistice.

As well, we are proud to have sent a Canadian delegation of veterans and government officials to South Korea for the 60th anniversary of the armistice on July 27, 2013.

This long-standing, strong, and meaningful relationship has been underlined by the recent leaders' visits. Indeed, The leaders have met twice this year. First, as I mentioned, the Prime Minister visited South Korea in March. In fact, the Prime Minister has visited South Korea on four occasions. The second meeting was just last week, when President Park made her first state visit to Ottawa. It was a great honour to welcome President Park and her delegation to Canada at that time. She was the first Korean president to visit Canada in 15 years.

The Governor General attended the inauguration ceremony of President Park in February 2013, accompanied by four Canadian parliamentary colleagues. This visit comprised part of the 50th anniversary of the establishment of diplomatic relations between Canada and South Korea. Both countries organized a series of activities and initiatives to further raise the profile of the relationship and deepen co-operation.

The Minister of Finance visited South Korea in October 2013 as Minister of Natural Resources, and the Minister of Fisheries and Oceans just recently travelled to South Korea to promote Canadian fish and seafood products.

The former Minister of Veterans Affairs, now the Minister of Public Safety, led a delegation of 35 Canadian veterans on a visit to South Korea in April 2013 as part of a revisit program for Korean war veterans. Some 74 Canadian Armed Forces personnel participated in the U.S.-Republic of Korea-United Nations Command military exercise in August 2014, forming the largest non-U.S. contingent from any of the other sending states.

I think members are beginning to see that Canada and South Korea are natural partners.

To further strengthen our already strong ties, Canada and South Korea have established a strategic partnership. Its purpose is to provide the opportunity to focus on areas affecting our bilateral relationship and to identify ways that we can work together regionally and globally on issues ranging from forestry to the Arctic to education to hosting the Olympic Games. This partnership will lay out a strategic direction for stronger relations in key areas of common interest, including energy and natural resources, science, technology and innovation, and Arctic research and development.

Our ties are not limited to bilateral relations. We recognize that we live in a changing and dynamic world. South Korea is in a region with many challenges. Canada and South Korea share similar regional views and objectives on a range of multilateral and global issues.

Our people-to-people ties are extensive and deep. Nearly 170,000 Canadians identify themselves as being of Korean origin. Over 23,000 Canadians are currently residing in South Korea, including about 3,200 language teachers, and 141,800 Korean tourists visited Canada in 2013. They constituted the eighth-largest source of tourists in Canada and spent almost $250 million in the Canadian economy.

Education ties are extensive and growing. South Korea is Canada's third-largest source of international students, with over 19,000 students. There are over 100 agreements among institutions in Canada and South Korea facilitating the exchange of students, faculty, staff, and curricula as well as providing joint research and degree programs.

South Korea is home to a Canadian studies community, including several university-based centres and the Korean Association for Canadian Studies. In Canada, the Korea Foundation supports several university research chairs and South Korean studies programs in universities across Canada.

When the Prime Minister visited South Korea in 2009, he was honoured to be the first Canadian leader to address the South Korean national assembly. At that time, he observed the following:

Canada and South Korea have been staunch allies in the defence of freedom and democracy.... We are not a warlike people, but when the cause has been just and necessary, Canadians have always answered the call. There is no doubt the cause of South Korean freedom was just and necessary. And, the truth of the ideals for which we fought has been revealed beyond a shadow of a doubt as this Republic has flourished, while the Communist North has floundered.

As I have described, Canada is a long-standing partner of Korea and its people. I believe that the Canada-Korea free agreement would contribute to this relationship and to both countries' mutual economic growth and prosperity.

I ask all hon. members to support this agreement, ensuring it enters into force as quickly as possible, as part of their support for Canada's broader collaborative and strategic partnership with South Korea.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I appreciate the speech by the hon. member.

I note that article 17.4 of this trade agreement states that “The parties”—that is, Korea and Canada—“shall strive to facilitate and promote trade and investment in environmental goods and services”.

Korea has been congratulated by the OECD on adopting and moving forward expeditiously on their green growth indicators. Korea has been at the forefront of green growth. It has a national strategy over 40 years and a five-year plan. It has committed 2% of the annual GDP to green growth, with investments geared toward infrastructure to boost the economy. It has passed a U.S. $30.7 billion stimulus package to support its green ambitions.

The question for the government is this: what will it do to implement its obligations under this treaty?

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Mr. Speaker, I would refer my hon. colleague to page 2 of the bill, where it talks about purpose. Right here it says:

The purpose of this act is to implement the Agreement, the objectives of which, as elaborated more specifically through its provisions, are to

And here one of the provisions explicitly is:

f) enhance and enforce environmental laws and regulations and strengthen cooperation between Canada and the Republic of Korea on governmental matters

We will continue to work on all of these areas with our partners to ensure that the environment is protected.

I spoke specifically in my speech about issues related to the Arctic. Canada has been taking very vigorous action on the Arctic, and we are going to share that with our Korean partners.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I have indicated in the past that the Liberal Party does support the trade agreement with South Korea. We see it as a step forward in overall international trade.

The member made reference to our current relationship, and we should be very boastful of our current relationship, whether it is foreign students or the economic ties that currently bring us together, not to mention out ties through immigration and the many contributions that people of Korean heritage bring to our communities, whether in downtown Toronto, out on the west coast, in my own lovable city of Winnipeg, or in all the regions of Canada.

That said, there are some legitimate concerns with regard to the agreement.

We see the benefits to the aerospace industry and we see the benefits to the pork industry. The specific question I have for the member is this: what sort of assurances can she provide to the automobile industry that the government and the agreement are being sensitive to the automobile industry, an industry we care deeply about?

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Mr. Speaker, as a member who represents the riding of Newmarket—Aurora, where the auto industry is thriving and we have secondary suppliers to the Big Three, I can say it is very important for the auto industry to stay strong.

I think we have had the discussion about how the tariffs would be reduced and how we would not have the kind of impact that some people are seemingly talking about as a threat to the auto industry.

I would like to address the hon. member's comments about the Korean people who have immigrated to Canada and the great cultural contributions they have made.

I have a rather large Korean community in my riding of Newmarket—Aurora. Substantially, they have a congregation that meets regularly in one of the churches in town, which tells me that the number of people in the area is large.

However, they have also bought farms in the area just to the west of me. They are providing produce, and they are excited about this agreement going forward because they see great opportunities for selling the produce they are growing here to Korea.

They are very excited about this opportunity. I thank them for the work they have done in our communities. I know they have invested in culture and in industry, and we thank them for what they have done for Canada.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, I am very pleased to rise today in the House to support Bill C-41.

Considering that it has taken approximately 10 years to get to this point, the NDP is proud of this agreement, which is the first free trade agreement that Canada has signed with an Asian economic partner. The terms of the agreement are largely satisfactory, with the exception of a few concerns that I will address later on.

Negotiations for this agreement officially began in 2005. The agreement, as it now stands, was signed on March 11, 2014, and was presented in the House on March 12, 2014. It was about time, because it had been nearly 11 years.

I would like to tell my colleagues about the criteria that the NDP uses to evaluate free trade agreements. To begin, the proposed partner must share basic Canadian values, such as respect for democracy and human rights, and it must have adequate environmental and labour standards. That goes without saying. When we negotiate a free trade agreement, we want to be sure that the other party shares the same values and applies the same industry standards that Canada does.

Then, we look at the proposed partner's economic situation. It must be of significant or strategic value to Canada. Finally, the terms of the agreement must be satisfactory. We believe that South Korea meets our criteria. Consequently, the NDP is supporting the bill. We have some reservations, but I will come back to them.

I would like to talk a bit about South Korea. Since the dictatorship collapsed about 30 years ago, the international community has watched the country transition to a modern democracy with high standards with respect to human rights, labour rights and environmental protection.

It is the only country in Asia to have been ranked 15th on the human development index. That accomplishment is due in part to the numerous social programs implemented by the government, the prevalence of the rule of law, low levels of corruption and access to quality education.

South Korea also launched an ambitious green strategy to improve its energy efficiency. It is abundantly clear that the country has great respect for the environment and that the government is making serious commitments in that regard. South Korea is a candidate that shares Canadian values around human rights, democracy and the environment. That is an extremely important aspect of an intelligent and balanced approach to a free trade agreement.

In addition, South Korea is of significant strategic value to Canada, which has been at a disadvantage ever since the United States and the European Union both signed free trade agreements with South Korea. That created an economic imbalance and affected a number of industries in Canada.

Preliminary estimates show that the agreement would eliminate almost 98% of tariffs for both parties. Also, Canadian exports to South Korea are expected to rise by 32%, which is worth about $1.7 billion. Let us not forget that South Korea can serve as a gateway to other Asian markets because of its position in the Asian supply chain.

Complementary aspects of the two economies redefine the success of the agreement because Canada and South Korea will not necessarily be in direct competition in their shared markets.

However, Canada would do well to support our automotive industry and create programs to encourage the Korean automotive industry to come set up shop here. I will come back to this later.

The biggest winners among Canadian industries are the heavy industry, agriculture—our pork and beef farmers have suffered greatly from the lack of agreement for many years—the forestry industry, the aerospace industry and the fisheries. A number of associations have expressed support for this free trade agreement.

I will start with the agricultural sector, which is vital to our economy. It accounts for about 8% of Canada's overall economy and provides nearly 2.1 million jobs. The two agreements signed by the United States and the European Union unfortunately affected our economic balance in the agricultural sector. For example, the Canadian beef industry saw its exports to South Korea drop from $96 million in 2011 to just $8 million in 2013. The same was true for pork exports. These two industries suffered a lot because we did not have a free trade agreement. The ratification of the free trade agreement with South Korea is an opportunity to turn things around for these disadvantaged industries, by eliminating 86.8% of the tariffs on those industries.

In the aerospace, seafood, forestry and food sectors, the situation is very similar. These sectors will significantly benefit due to the abolishment of export tariffs and increased market share in South Korea and the Asia-Pacific region in general. Jayson Myers, president and CEO of the Canadian Manufacturers & Exporters, says “Asia’s rich markets are the next frontier for Canada” in our desire to abolish all kinds of obstacles to ensure the expansion of trade investments.

While the agreement is superior to the one with China and the EU, we expressed a few concerns about this FTA. As I mentioned previously in my speech, there are some issues for the auto industry.

First of all, the NDP is calling on the government to do more to support the auto industry in Canada and is eager to propose solid, effective policy measures to strengthen the Canadian auto sector. The government can and should encourage Korean auto production in Canada and assist Canadian automakers to penetrate the Korean market.

The government continues to fail the auto sector, and I think it is time for it to take a more comprehensive approach. Our auto sector has suffered continuously from the lack of propositions by the government. The most positive features of the Korean FTA are the rules of origin provisions that favour Canadian-U.S. integrated products and the accelerated dispute resolution mechanism that allows for the monitoring of non-tariff barriers.

At the same time, our party has expressed some legitimate concerns about the Korea FTA regarding the Canadian auto sector. Unifor and Ford Canada's opposition is sensible as the FTA Korean imports will negatively affect domestic auto sales. As well, Canadian auto exports will suffer from Korean non-tariff barriers. Additionally, Korean producers seem to penetrate the domestic market through other NAFTA countries. For example, 50% of Korean auto products enter the Canadian market tariff free through the U.S.

In closing, I would like to talk about the many potential problems with the investor dispute settlement provisions. As we know, the German government said that it was not necessarily ready to ratify the Canada-European Union free trade agreement because Canada had insisted on including investor-state dispute resolution provisions. We know what kind of adverse effect this type of mechanism can have on the sovereignty of governments and on their ability to adopt environmental or economic regulations that favour industry in Canada.

The NDP is asking that free trade agreements not include this type of mechanism. As I already said, this could have an adverse effect on the sovereignty of governments.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I wanted to pick up on a couple of points that my colleague made near the end of her speech, pointing out that 50% of Korean cars currently enter Canada duty free from the U.S. under NAFTA and that over 85% of Canadian production is exported. We know that is the current situation, but since the Korea-U.S. free trade deal was signed, U.S. auto exports to Korea have more than doubled from $340 million in 2011 to over $800 million in 2013. Since the Korea-EU agreement was signed, exports to Korea have doubled from $2 billion in 2010 to $4 billion in 2013.

Considering the facts that currently 50% of Korean cars can enter Canada through the NAFTA already, if we remove these tariffs would we not expect to find similar results to the U.S. and the EU after they signed their Korea free trade agreements, with auto exports actually doubling? Also, Ford set an annual sales record last year in Korea. From 2012-13, Ford was the fastest growing brand being sold in Korea. The concerns that the Ford Motor Company had and the concerns about possibly reducing numbers, I think these numbers would indicate the opposite.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, I thank my colleague for raising the point I wanted to make in the House.

The government failed to help the auto industry in Canada. We have continuously been disadvantaged through the government's inability to strengthen our industry.

The government should be adopting policies to help stimulate Canada's automotive sector and encourage other countries to invest in Canada.

The point I was trying to make was not about whether the free trade agreement was going to support the industry or not. I was talking about the government's constant lack of leadership when it comes to stimulating our own economy.

Signing a free trade agreement is not necessarily the equivalent of waving a magic wand and erasing everything the industry has gone through since the government refused to adopt policies that were appropriate for the situation.