International Trade Committee on Nov. 29th, 2007

[Joan Baron]

The U.S. is Korea's third-largest supplier of importing goods, behind China and Japan, and they face discriminatory barriers similar to ours. The most-favoured-nation tariffs are three to four times what the U.S. tariff of about 2.2% is, so Canada and the U.S. are very similar on their tariffs, and Korea is of course much higher.

So the U.S. is in favour of this agreement for the access that it will give them to the third-largest economy in Asia and for the benefits they see. They want to maintain their position as the importer of choice from North America.

I believe their rationale for wanting an agreement is similar to ours, but they are also pursuing opportunities to invest within Korea. You may know that Bell invested in Korea many years ago and exited with over a billion dollars in profit after two years, so clearly foreign direct investments into Korea can be profitable for Canadian companies as well.

As to modelling, no, we have not done that.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Do you think the U.S. agreement and the Canadian agreement would be similar, or would the Canadian one be “Harper-lite”?

[Joan Baron]

I cannot comment on Harper-lite, but I believe we have very experienced negotiating teams, and I would expect that our agreements would be similar. However, if we offend the Koreans by withdrawing and thinking we can come back whenever we want, in a couple of years or so, it's a no go.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Temelkovski, and thank you again, Ms. Baron.

Well, it is five o'clock. I was hoping we might get a couple more questions in, but--

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I was hoping I would get my one question in.

[The Chair, Conservative, Lee Richardson]

Is that unanimous consent?

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

It's unanimous.

[The Chair, Conservative, Lee Richardson]

All right, a quick one for Mr. Miller.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

This question is for Ms. Baron.

Listening to all the comments around here, to all the very good presenters, it's clear to me that basically right now we have access to the Korean market, albeit with a tariff. The Koreans have access to our market, albeit with a tariff. I've heard it many times here today that there's an imbalance in the auto trade.

How would a free trade agreement change that imbalance, in your opinion?

[Joan Baron]

I believe a free trade agreement would change that imbalance by removing the tariffs that apply right now for cars that come from Canada across into Korea. That's the first thing. Secondly, it would remove the slight tariff that applies for Korean cars in Canada, but frankly they're doing pretty well. It could also create the opportunity for assembly plants in Canada.

I note that Magna is over in Korea already, so they see opportunities in parts and in integration there. I think we could see that accelerate. In fact, one of Magna's strategies was to create a Korean company to get around some of these tariff issues.

A free trade agreement will provide a level playing field, remove the necessity to do some of this, provide more security in terms of being able to get your money out if you should choose to, and so on. Otherwise, you're operating with too much uncertainty, I think. That's the real benefit that governments convey when they do these free trade agreements. It enables business to go in and operate, knowing they have the certainty of that agreement behind them.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

You mentioned Magna. Is there any connection to the Stronachs there?

[Joan Baron]

No kidding.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Yes, I thought that was the company.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you again, Ms. Baron.

Thanks, Larry, for that.

I think that's all we're going to have time for. We did say five o'clock.

I want to again thank the witnesses. This was terrific and very well done. I appreciate it very much. I guess we won't be able to have Ms. Baron back, but we may be able to have Mr. Sinclair back.

[Joan Baron]

If I'm in the country, it's a short flight. It's eight hours from Seoul to Vancouver coming this way. It's a short flight, so no problem.

Gentlemen, your work is very important. I thank you for this opportunity.

[The Chair, Conservative, Lee Richardson]

Thank you very much again.

We're going to move now to some of our routine business.

I see on the agenda that we have this notice of motion from Mr. Pallister.

Did somebody want to move that? Or will we wait until next time?

Okay, fine, we won't deal with that today.

I want to get some concurrence on where we proceed from here. I'd like to suggest that on Tuesday next we will start off at 3:30 with the routine business. If Mr. Pallister wants to bring back his motion, I suppose we can deal with it then. He didn't give notice, so we'll only get notice if he comes or if he doesn't.

I do want to get the opportunity to deal with Bill S-2 on the agenda. We don't have to deal with it, but I want to make sure that we can have an opportunity to discuss whether or not we want to deal with it. It'll be on the agenda whether or not we're going to deal with Bill S-2. I would ask the various representatives to consult with their own finance people or their party people as to what their disposition would be on Bill S-2. My sense is that I don't think it's going to take a long time to deal with that. We just want to move it back to the Senate.

I'm not going to prejudge. I just want to be able to deal with it on Tuesday if we have the time. That's the first one.

Secondly, we were going to deal with this outstanding report, if we don't get it finished right now. I think we can probably get it finished right now, but if we don't, I'd like to wrap up the other report. We might have time to give it the final stamp of approval if we get it finished today.

I think with all of that we can still get that done by four o'clock. At four o'clock I would like to suggest that we have the minister for an hour and a half, for the rest of the meeting. That's just the outline.

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Chair, the tentative schedule had the CAW and the Motor Vehicle Manufacturers' Association for Tuesday. Is this not the following Tuesday you're talking about?

[The Chair, Conservative, Lee Richardson]

Fine, okay. The clerk has just advised me....

This is news to me, the reason for the change, so just give me a second with the clerk.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Yes. The draft schedule had the minister coming on December 11, and next Tuesday was the CAW and the Motor Vehicle Manufacturers' Association.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

So has it been flipped?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I don't know. That's why I was asking.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I don't have a list, but I remember them saying that....

[The Chair, Conservative, Lee Richardson]

Apparently, the reason for the change was that the only time the minister could appear, if we're going to get the estimates approved, was on December 4--I think the date was December 8 that we had to have them approved by--if we were going to deal with it.

They have to be done by the end of next week, so it seemed that we would have the minister when available, as scheduled. They suggested that December 4 was it. So they've gone to all these people and asked them if they would come back, and I would guess now it looks like it's going to be after Christmas.

So that's the answer.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Chair, we still have three sessions scheduled after next Tuesday.