Good afternoon, members of the committee. Thank you for the opportunity to appear before you today.
I'm here to speak on behalf of the Canadian Labour Congress, which is Canada's house of labour. The CLC represents over three million working people across the country.
We are pleased to participate in your study on the implications of the bilateral trade negotiations currently under way between Canada and the Republic of Korea. We know that your findings and recommendations will have an impact on how the Canadian government decides to proceed with the Canada-Korea trade file, and we wish to make a meaningful contribution to your report. We realize this is especially important now that the negotiations have come to what seems to be an apparent impasse.
We have three major concerns with the Canada-Korea negotiations. First of all, we are concerned that the model of trade under consideration will solidify Canada's role as a resource-producing region within North America and within the world economy, at the expense of Canada's manufacturing base and communities and public services. Second, we are concerned that the deal is wrong for workers in both countries. It puts corporate profits ahead of the needs and interests of working people in both Canada and Korea. Third, we are concerned that Canada is playing an unfortunate role at the level of world order. Instead of understanding why there is such deeply held and widespread opposition to neo-liberal trade and investment policies around the world, Canada is unfortunately reinforcing U.S. unilateralism, to the detriment of the multilateral system.
Our first point concerns long-term effects and structural changes in the Canadian economy. We represent women and men who work in resource industries, and with our affiliated unions we continue to work for collective agreements and public policies that ensure good, safe, environmentally responsible jobs in these sectors. We recognize that Canada's natural resources have often been the basis upon which we as a society have supported secondary manufacturing, public services, and strong communities.
With thoughtful stewardship of our natural resources, we could ensure economic justice and prosperity for many generations to come. We realize that the fate of many Canadian communities is linked with stable export markets for resources and agricultural products. Nevertheless, we are very concerned that Canada's rush towards a bilateral free trade agreement with Korea is intemperate and short-sighted and will lead to even more uneven development.
You have heard from other presenters that Canada's trade with Korea in manufactured goods is wildly unbalanced. As the Canadian Centre for Policy Alternatives has shown, Korea exported $1.7 billion in automotive products to Canada in 2006, meaning that for every $153 of automotive products Korea sends to Canada, we export only $1.
Our major exports to Korea are in resource industries, and include coal, wood pulp, aluminum, and copper. A free trade deal between our two countries is likely to ensure that the mix of trade will favour resource-based exports and manufactured imports. It is likely that food processing and paper industries would benefit from an expansion in Canada-Korea trade. If Korea decides to open up its beef industry, this might benefit workers in Manitoba. Workers in Kelowna might also benefit from the export of paper products, but job losses in other sectors will be much greater.
As you have heard from other presenters, it is expected that high value-added manufacturing industries will be negatively affected. These include the electronics, machinery, and automotive assembly and parts industries, and the textile and apparel industries, among others. Using real-world assumptions, the Canadian Auto Workers concludes that at least 33,000 jobs will be lost.
Members of this committee who represent the people of Sherbrooke, Welland, Niagara, Mississauga, Markham, Owen Sound, the lower mainland, and Louisville, Quebec, will be intimately aware of the effects of plant closures on families in their ridings. I'm sure they could vividly relate to the impact of plant closures that have already happened and their impact on the communities they represent.
As you know, Canada has lost nearly 300,000 manufacturing jobs since November 2002. One in eight of Canada's manufacturing jobs that existed six years ago is gone. According to Statistics Canada, workers displaced by closures and layoffs, and those who go on to find another job, suffer an average decline in income of over $10,000, equivalent to 25% of a typical manufacturing wage. As our CLC economists have found, the total number of jobs in mining and in oil and gas extraction is less than the number of jobs lost in manufacturing.
Wwhile plant closures might not be the issue of the day in certain parts of the country, we would like to remind the members of Canada's historical weakness in the capital goods sector. If Canada were stronger in advanced green technologies and in the manufacture of capital goods, the economic boom in the oil sands could be that much more balanced and sustainable.
The service sector is affected as well. Many of these jobs are low paid and are tied to the support for the manufacturing sector. Workers in the service sector are disproportionately women and workers from racialized groups. These workers are disadvantaged because of their already precarious employment situation, and will now be doubly disadvantaged because their sector is so closely tied to manufacturing, which is under attack.
Second, we are aware of the opposition to free trade in Korea and of the negative impact on workers in both Canada and Korea. Recently, the Canadian Labour Congress and the Korean Confederation of Trade Unions issued a joint statement and called on our respective governments to halt these trade talks immediately. In light of the serious manufacturing crisis, the devastating deterioration of Canada's automotive trade balance, as well as the serious risks facing the Korean agricultural sector posed by this agreement, both labour centrals recognized that the Canadian and Korean manufacturing sectors will be adversely affected. In Korea, workers face the trend towards irregular and precarious employment, already at 54% of the labour force. This will only intensify as a result of such a trade deal. Korean and Canadian workers suggest that our governments choose instead to engage in a process of real consultation with labour and relevant stakeholders, one that will lead to an economic development strategy that will build our societies rather than pit worker against worker.
Third, we are further concerned that the Canadian government has decided to abandon an independent trade policy and, as it is doing in negotiations with Colombia, is pressing forward with a trade agenda that is widely unpopular around the world and one which the U.S. administration cannot get past Congress. Canada, it seems to us, is playing the unfortunate role of legitimizing unpopular bilateral deals forged by the United States. In the context of a weakening multilateral international system, this strategy concerns us.
By following the North American Free Trade Agreement model, the governments of both countries are trying to undermine opposition in the international community. Evidence of such opposition is seen in the apparent failure of the Doha Round. Yet the Canadian government continues its efforts to undermine this widespread opposition and entrench investors' rights at the expense of workers' rights and their wages on a bilateral basis. We expect these negotiations are intended to impose NAFTA-style restrictions on industrial policies and to entrench WTO plus intellectual property rights. Following in the footsteps of the unratified U.S.–Korea deal, we're concerned that both governments intend to weaken public services and social safety nets to the point where they are ineffective in protecting the people of Korea and Canada from the painful side effects of an unrestricted free market.
Not having learned the lessons of NAFTA, there are plans to keep the infamous chapter 11 provisions, which allow corporations to sue governments that act in the public good and keep governments constrained from implementing active social, environmental, and industrial policies. The core of these negotiations is based on a devastating model of development that can only lead to competition at the expense of workers' rights, labour standards, and the environment. These agreements, which grant excessive rights to business—in particular to transnational corporations—and facilitate the mobility of speculative financial capital, weaken workers' rights and lead to the erosion of basic labour and human rights.
Our recommendations are as follows. The Canadian Labour Congress calls for a moratorium on the current Canada–Korea negotiations. We recommend that discussions begin on a fair trade arrangement based on the rights of workers in both countries to fair social and economic development. We further call this committee to recommend that Canadian trade policy take a back seat to sustainable industrial and social policy, so as to ensure decent jobs based on the fundamental rights enshrined in ILO core conventions.
I thank you for considering our views on this matter and look forward to your questions.