Thank you, Mr. Chairman.
Thank you very much for having given me an opportunity to present our viewpoint on this rather important and thorny issue.
I'll be reasonably brief, and I look forward to a wide-ranging conversation.
As a quick introduction to Bombardier, we make planes and trains. We have 55,000 employees around the world. Thirty-four percent of those employees are in Canada, although 95% of our sales are outside of this country. Our workforce here is 19,000, including roughly 16,000 in the aerospace field and about 2,500 in the rail transportation field. We have six manufacturing plants across Canada and roughly 500 suppliers in this country.
Bombardier Aerospace is the third-largest manufacturer of civil aircraft in the world. Our competitors are Boeing, Airbus, and Embraer. It's a small playing field with some very large bodies on it.
Bombardier is the only manufacturer that creates regional aircraft that are both turboprop and jet-driven. There are over 22,000 Bombardier regional aircraft flying around the world. We also produce business aircraft and there are roughly 3,400 Bombardier business jets flying around the world. Bombardier is the largest manufacturer, by value, of business jets in the world. This is just to give you a little perspective on that side of the company.
Most Canadians would know less about Bombardier Transportation than about aerospace because most of its activities are based in Europe, although we have two very important plants in Canada. It is present in more than 60 countries around the world. It has 42 production facilities in 21 countries, including in Canada. There are roughly 100,000 Bombardier-manufactured rail vehicles now in service around the world.
We are a reasonably global company and very proudly Canadian, but operating under all sorts of different conditions in many markets. Those markets include the Republic of Korea, which is a great economy with a GNP per capita that is roughly half that of Canada. It is a very advanced and sophisticated economy that is well organized and efficient. It is home to many formidable competitors in global businesses, including our own.
Nonetheless, Bombardier has been successful in penetrating the Korean market, thanks really to the fact that we had unique technology. The automated People Mover that is built in Thunder Bay, by the way, was our first breakthrough in Korea. We sold a system to the city of Yongin, which is essentially a suburb of Seoul, and we are part of a consortium of companies that are in the process of completing a very large project in that municipality. We also have prospects for selling rail vehicles and systems in this technology to Inchon, which is a major port city.
We are there; we are involved, and so far we have been successful. There are inhibitions to being successful in that market, and also in competing with Korean competitors, who, as I said, are formidable in this field.
Perhaps I'll spend a moment on the issues that concern us. These are all issues that should and would, in the normal course of events, be addressed in a free trade agreement. If anything, a free trade agreement--given the current situation in the world with the absence of progress on the WTO--is important. Although it would be extremely important to shape the world in the image that we would like it to be--one of free trade and level playing fields--unfortunately, the world does not yet heed Canada as much as it should. In the meantime, as we shape the new order, we have to live with what is in place.
At the moment, what is in place still calls for a special effort in bilateral trade negotiations, particularly with Korea. As you know, Korea has in fact concluded a free trade agreement with our central trading partner, the United States, and hence is perhaps in a less accommodating mood to grant us what we need. Nonetheless, the effort has to be made and it has to be pushed with intent.
I would mention three preoccupations we have in the rail sector. They may not seem enormous, but together they are a significant illustration of the fact that we are facing--in the case of Korea, as in many others--an imperfect market situation.
The issues relating to local content in public procurement are unclear in Korea, as they are in many jurisdictions. I think, to make this conversation brief, it is up to local authorities to impose whatever level of local content Korean manufacturing they wish. I should note parenthetically that this is the case, or that there are even more severe local content requirements, as part of the policy framework for the procurement of public transit and other infrastructure in most markets in the world, including the United States where there's a demand for 60% local content and a demand for a complete final assembly.
Canada is an exception in this field. The absence of a level playing field is an interesting one to note in this context, particularly because in another dimension of an unlevel playing field, Korea, as you know, Mr. Chairman, still qualifies under the general system of preferences for duty-free entry of manufactured products, including rail vehicles, into this country, whereas we face a tariff structure of roughly in excess of 8% for sales into Korea.
So, if I may put it that way, there is a levelling of the playing field that may be useful and can only be pursued through bilateral negotiations. There are other non-tariff barriers, as these all are, that were referred to earlier. The issue of certification, for instance, is an interesting one whereby we are required to certify vehicles that have been certified in other major jurisdictions all over again when we sell them into Korea. This is extremely expensive and difficult. It's not life-threatening, but it is a barrier. Issues related to intellectual property protection, though the system in place in Korea is of a high standard, also always pose a problem and a challenge.
I should stop there, though I will just mention that we are also successful in selling aircraft into Korea. Bombardier regional aircraft are flying in that country without let or hindrance, although the tariff could be improved to allow us a better opportunity in that market.
To summarize our position and our view on this question of whether Canada should have more intense and better regulated trade relations with Korea, our answer is yes. Not only is it yes, it's important. Not only is it important, it is a matter of some urgency, given the state of the international trading system today.
Thank you, Mr. Chair.