Thank you very much.
I thought I would start off by giving a brief description of the Fisheries Council of Canada. We're primarily a processors and exporters association, but at the same time we do represent harvesting fleets. We have pretty well all the harvesting vessels in British Columbia. In Atlantic Canada, the deep-sea shrimp vessels, the scallop vessels, and the groundfish vessels are members of the Fisheries Council of Canada.
We started off as a federation, and we're now a bit of a hybrid between the federations, being members of the Fisheries Council of Canada and direct member companies. Basically, if there's a provincial processing association, the companies are members of the Fisheries Council of Canada through it. So we have members in British Columbia, Ontario--and I should say in Ontario the Fish and Seafood Association of Ontario is made up primarily of importers and distributors--Quebec, Nova Scotia, New Brunswick, P.E.I., Newfoundland and Labrador.
Canada is developing its northern fisheries with respect to the Inuit areas, so we also have representations from Nunavut, Nunavik in northern Quebec, and a new territory in Labrador, Nunatsiavut.
In summary, we represent the vast majority of fish and seafood production and exportation in Canada.
I'll make just a short comment on the fishing industry of Canada. We are a $4.7 billion industry. We have 100,000 workers. About 53,000 are on the sea as harvesters. There are 47,000 working in processing plants throughout Canada. There are 23,000 fishing vessels on our waters, and 950 fish processing plants.
We are a $4.7 billion industry, and we export $4 billion. We are an export industry, as 85% of our production is exported. What we have out there are four what we would call traditional markets. To the United States, we export $2.6 billion. That's 50% of what we produce in Canada.
The Canadian market is also important. We supply about $1 billion into the Canadian market, and that represents about 15% of our production. As well, we export to the European Union $470 million or 10%; and to Japan $340 million or 7%. Those have been our long-standing traditional markets, which have been with us for many years. We export to a lot of countries, but we do see three emerging and significant markets. One is China, including Hong Kong, to which we export $380 million. The second is South Korea, at $47 million. The third is Russia, at $44 million. So we have traditional markets, including Canada, capturing about 87% of what we produce. But we see three significant emerging markets for us, notwithstanding the fact that we export to many, many more countries.
I should note that with respect to Russia, I identified them at $44 million, just below South Korea, but there is no question that in 2007-2008 they will be, for Canada, a $75 million to $100 million market.
I just want to make some comments. Internationally, fish and seafood is the most highly traded commodity in the world. In terms of world commerce, it exceeds oil and gas and grains and so forth.
The other comment I want to make is that in the food sector, fish is considered to be a high-cost protein. So in targeting our efforts, what we look for are economies, countries, or cities that have a middle class with disposable income that can afford the type of relatively high-cost protein, compared to chicken and other products.
As I said, 50% of what we produce is exported to the United States. As you know, in the last four or five years the American dollar has weakened quite substantially. Our strategy is to diversify, obviously out of the United States, but also into countries whose currencies are not pegged to the U.S. dollar.
So you can appreciate that one of the reasons I say Russia is increasing this year is that we're also having some difficulties in China, because the Chinese currency is pegged to the United States dollar.
We see Korea as an opportunity, for a number of reasons. One, of course, is that it is an expanding economy. There is significant development of the food service sector, restaurants and things of that nature, which is providing lobsters to its population.
Also, its fishing industry is changing. In 2005 South Korea, for the first time ever, imported more fish products than it exported. To a certain extent that reflects the fact that the rather significant long-distance fishing fleet of Korea would not fish in Korean waters but on the high seas, including off Canada's east coast. That type of fishing has become less viable, for a number of reasons: one, stocks on the high seas are declining; and two, we see more and more of these regional fisheries organizations such as we have off Canada's east coast, NAFO, being established on the high seas, so that means more regulations and so forth.
A big issue as to why the Korean fleet cannot supply their market as they have in the past is that with the amazing increase in fuel prices, long-distance fishing is becoming very uneconomic. In fact, as I mentioned, we have a regional fisheries organization off Canada's east coast called NAFO, which manages the straddling stocks and some discrete stocks. Korea is a member of that, but its vessels have not been in those waters for two or three years solely because of the economics.
Also, I think there's a recognition that there are emerging Chinese and Russian fleets that are moving quite significantly into long-distance fishing. I think countries such as Korea are no longer really wanting to invest in that.
With respect to Korea--as I said, $47 million of exports--the main item is lobster, about $15 million, which currently has a 20% duty. With respect to shrimp, Canada is the largest producer of cold-water shrimp in the world now, and it has been a real challenge to find markets for that product. Korea has stepped up, and we have $6 million into Korea--over 27% duty. Having had significant reduction in the cod and grounfish fishery, the fishermen in Newfoundland and Labrador put in private investment and restructured from a groundfish fishery to a crab and shrimp fishery. So this is pretty important that we are able to find markets for that type of product, and it's pretty important for coastal communities, particularly Newfoundland and Labrador, but also Quebec and New Brunswick.
With eels, that's $3 million--over a 10% tariff; clams are $3 million, again, over 10%; redfish/ocean perch are $2 million at 10%; and mackerel, about $2 million at 10%.
I should say that of those six or seven products, three of them--eels, redfish/ocean perch, mackerel--don't have that much of a market opportunity because of their distinct taste. It's a developed taste. So that Korean market is a little more important for those types of products than for others.
What we're looking for, as I say, one of the three top significant emerging new markets for Canada in fish and seafood.... We're paying tariffs anywhere from 10% to 27%. If we can get duty-free access, we see not only an expansion of that trade but a needed diversification of our export profile, and I hope with reduction of tariffs we can see better margins and try to see some improved financial performance in this industry.
I shouldn't leave without talking about imports. We export $47 million to Korea. We import $9 million, and the $9 million is miscellaneous fish. About $2 million comes in duty-free already. Oysters, about $1 million, there's a 2% type of duty, with $800,000 free.
As you can appreciate, in fish and seafood Canada has always been an export nation, and our market is a duty-free market except for a few selected items.
In conclusion, the Fisheries Council of Canada fully supports the Canada-Korea free trade agreement, and this is not just following the U.S. lead. From our perspective, if we get free trade in fish and seafood, it puts us on a level playing field with some already important fish exporters in the world, namely Chile and also the FTA countries. In the FTA countries, our major competitors in the European market are Norway and Iceland. They're there already with their free trade, and we hope Canada will be there fairly soon with our free trade.
As you know, other countries are lining up. The European Union is lining up. Of course a major exporter of fish and seafood around the world is Denmark, and of course, as my friend here said, the U.S.A.
So there you are. Thank you very much for your attention.