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

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

moved that Bill C-41, An Act to implement the Free Trade Agreement between Canada and the Republic of Korea, be read the third time and passed.

[Erin O'Toole, Conservative, Parliamentary Secretary to the Minister of International Trade]

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.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I want to congratulate my hon. colleague on his speech. We work together on the international trade committee, where we have been studying this important deal.

As Canadians know, the New Democrats are supporting the Canada-South Korea trade agreement because we believe, on balance, it is of net benefit to Canada. I am happy to work together with my colleague to expedite the bill through the House.

He is right about the need to put this agreement in place quickly. We heard testimony in committee from a number of witnesses that it is important for the Canadian business sector to have the agreement in place, if at all possible, by January 1. That is when the next tranche of tariff reductions come down in the Korea-U.S. deal, and we need to keep our businesses competitive.

I want to focus on one aspect of the deal and get my hon. colleague's comment on it. South Korea is a world leader in green technology, renewable energy, and conservation technology, and unlike the Conservative government, it is dedicating a substantial amount of money, 2% of its GDP, to that sector. With a trillion-dollar economy, that is $20 billion a year that South Korea is investing to develop green technology. That is one thing New Democrats believe is a positive about the deal: Canada can join with South Korea and improve our trade in that very important green technology sector, which we believe will be an important sector for Canada's economy in the future.

I wonder if my hon. colleague has any comments on the opportunities that this deal may present for Canada in terms of green technology, renewable energy, and energy conservation.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank the member for his question and his remarks. Our committee, by and large, functions very well, and I want to thank him for his collaboration on the urgency of getting Bill C-41 through the committee stage. As he said, the January 1 deadline is critical, because we could fall further behind.

In my remarks I touched very quickly on some of the industrial components on which tariffs would be reduced. Ninety-five per cent of tariff lines in the industrial side would be reduced. For example, manufacturing of solar panels or wind turbine parts would be caught by those provisions, and those tariffs would instantly come down.

My friend likely knows there is already quite a large investment in Ontario by one of the large South Korean conglomerates in this area. That has led to some employment. Certainly implementation was not done very well by the Ontario government, because there have been some trade challenges in that area of renewable energy, but we see this area as a potential win.

The evolution of our relationship to a point where we are a most favoured nation on the trade side would also lead to regulatory environmental coordination and compliance efforts. Whenever countries like ours collaborate, two of the top 15 economies, it is only going to improve environmental standards over time and increase the opportunity for jobs in that sector.

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

Mr. Speaker, we had the opportunity to speak to the bill when it was in the House earlier. I know my colleague had an opportunity to discuss some of the people-to-people ties we have with South Korea. In my riding of Newmarket—Aurora I have a rather substantial Korean-Canadian community. They are hard-working, industrious people, but they are also the bridge for many of us into the South Korean market. I wonder if my colleague has any comments on that people-to-people tie that Canada has established.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank the hard-working member for Newmarket—Aurora for joining us again. The last time she intervened in my speech at second reading, she shared a very personal story about her family's service and her relative, whose name is one of the 516 names on the monument where I laid a wreath. Moments like that bring all members of the House together, particularly after last week.

Sharing our own perspectives and those of 200,000 Korean Canadians is critical. Several from the Vancouver area appeared before the trade committee. Their perspectives have been critical in getting us to this stage. I have mentioned a few people individually over my two speeches on this bill, but that has been the evolution of the relationship between our countries. It was our commitment to the Korean War, and then it was increasingly the people-to-people connections.

As well, it is the educational component. Many people from South Korea come to our fantastic universities and colleges across the country, and increasingly our young university graduates going to teach English in Seoul and other regions of South Korea.

We cannot create these types of bonds at a government level. It is a real enhancer and it will only increase once this agreement is in place.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I will have the opportunity to speak to this tomorrow morning. It is a pleasure to hear today's debate and participate in it.

I would like to reiterate that the NDP supports free trade agreements with democratic countries such as South Korea. It could be excellent news for various sectors, including the aerospace industry, which is very important to my riding.

The NDP uses a number of criteria to assess free trade agreements. The agreement has to be beneficial to Canada, and it must be concluded with a democratic country that has very rigorous regulations governing the environment and human rights.

I would like to ask the government why it chose to negotiate a free trade agreement with a country like Honduras, whose economy is approximately equal to that of the Ottawa-Gatineau region? The current government there is not doing anything to address the fact that journalists are being murdered. Leaders and workers are also being murdered there. Why did the government choose to negotiate a free trade agreement with a country like Honduras?

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, the member for Rivière-des-Mille-Îles is a nice addition to our trade committee. It is clear that she does not want to talk about this great agreement, so she is talking about something else. She has learned the art of politics already, I see. However, I am glad she raised this point.

It is critical to note that trade is a way to engage countries. Countless witnesses at the trade committee and even some of the people from Honduras who are working on missing people said, as my NDP friends would have to admit, that these countries cannot be excluded from the global community. Engagement leads to more democracy, more institution-building, and a better life. When we were working on the Honduras agreement, we heard the choices people had: either narcotrafficking, or potentially working with global exporters in countries trying to invest in that country.

We can just ignore these problems, or we can engage. We are also investing to help strengthen that country's judicial and investigative systems to make sure that crimes are punished.

We on this side of the House choose engagement. We choose to give people stricken by poverty in these countries an opportunity to provide for their families. That will lead to better choices. When we also target our aid through the strategic economic diplomacy that I am proud to be a part of, we are helping them to improve their institutions as we give people on the ground more economic opportunities. I am proud of all of our deals, large and small.

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

Mr. Speaker, I wonder if we can get some sense of the government's current approach to investor state agreements.

The hon. member will know that the Green Party opposes them in any context, but there is a vast difference between the draft text on the proposed CETA and this Canada-Korea agreement. CETA is obviously an attempt to appease European parliamentarians who do not want it in any way, shape, or form. It is much more open. It allows the public to attend.

I am wondering if my hon. colleague has any comments on the differences.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, it is always good to debate with my friend, the member for Saanich—Gulf Islands. I was hoping for a moment that we might hear briefly from the Liberal trade critic. Perhaps we will next time.

ISDS, or investor state dispute settlement programs, are critical within these agreements, and there is a reason for the difference between the two. Countries of the European Union have fairly long histories and well-developed legal systems, whether common law or civil law, both of which Canada has, and they have certain expectations with respect to having all parties agree as to where a dispute will be settled and under what sorts of laws or what regime. That is very common in commercial dealings.

It is different in emerging countries, particularly in Asia. Our friends in South Korea talked about their development and about how their judicial system has a different path and less of a timeline. These countries should come to a slightly different agreement with respect to their dispute settlement.

Pointing out differences just recognizes that there are different expectations among countries, but both parties agree, as in any agreement.

[Don Davies, NDP, Vancouver Kingsway, BC]

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.

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

Mr. Speaker, I thank my hon. colleague, the trade critic for the official opposition. I am pleased to hear him say that he prefers not to see investor state agreements in trade agreements, but they are now becoming all too common.

The ratification of the Canada-China investment treaty, which is certainly the most egregious of all of them, will lock Canada in for the next 31 years. In that instance, we have an investor state agreement where the entire process is secret. The first six months involve private diplomatic wrangling. It significantly undermines Canada's sovereignty to have an agreement like that ratified.

We have had different gradations of investor state agreements ever since the first one with NAFTA and chapter 11. Therefore, how can the official opposition vote for this trade treaty even though it does ensnare us in yet another investor state agreement?

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, that is a very thoughtful question that I think deserves a thoughtful answer.

The New Democrats believe that each trade agreement has to be evaluated on its own merits. We have to identify the partner involved and we have to look at the agreement itself. There are some profound and significant differences between the investor state provision in the South Korea agreement and the one my hon. colleague talked about with respect to the Canada-China FIPA.

For one thing, the Canada-China FIPA investor state provision would bind Canada for 31 years. The Korean agreement is six months.

Second, the Canada-China FIPA permits either sued party, whether China or Canada, to have the tribunal hearings held in camera, in secret, thereby avoiding one of the hallmarks of the rule of law, which is open public court proceedings. The South Korean agreement explicitly requires that investor state proceedings are to be made in public, using the word “shall”.

Finally, China is, of course, a very different country than South Korea. China is a command economy and a major capital exporter, whereas South Korea is an open market economy that has been on a trade liberalization regime for quite some time. The concerns about state enterprises or South Korea using the power of its state interests to further its interests in Canada's sensitive sectors are not quite the same.

However, the member is quite right that a New Democratic government, and it is our party policy, would not negotiate agreements with investor state provisions. We do not think they are necessary. That is why the New Democrats believe that the South Korea agreement must be monitored very closely. If it turns out that the investor state provisions are being abused in the South Korea agreement, New Democrats would not hesitate to invoke the cancellation provisions of South Korea, which would end the agreement on six-months notice, and it would not have any further binding effect after that time.

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

Mr. Speaker, I want to say how pleasant it is to be in the House and hear that the NDP are supporting a free trade agreement. It is very refreshing.

My colleague spoke quite eloquently about some of the opportunities that he sees across Canada. He also spoke about some of the witnesses before committee. I was not there, so I have not had the benefit of their testimony. I wonder if the member could inform the House of the things that he sees as possibilities for job creation and opportunities for businesses in his own riding.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I thank my hon. colleague for the kind words. As she said it was refreshing to see New Democrats vote for a trade agreement, I would like to see the government support a child care program. Perhaps we can mutually improve this country by working together on some important policy areas.

I come from Vancouver and my riding is Vancouver Kingsway. Of course, British Columbia is Canada's Pacific province and we have a very strong orientation towards the Asia-Pacific. This is something that I think is sometimes not recognized quite as much as it ought to be in Ontario and Quebec, who tend to be South America, European or American focused. However, the opportunities for British Columbia, and Canada through British Columbia, to build strong economic relations as well as cultural, social and political bonds with South Korea and other important countries in the Asia-Pacific region are explosive.

We know that China is posed to be the largest economy in the world in just a number of years. It is Canada's second-largest trading partner. Therefore, any opportunity we have to strengthen our economic relations with an important Asian economy such as South Korea will pay dividends for Canada down the road.