Thank you very much.
Good afternoon, ladies and gentlemen. Let me first of all apologize for not submitting a written statement. I only received notification about the call late on Monday, and I wasn't able to put together a submission. Also, I do have to leave after an hour. I hope the message, through the clerk, made its way to the members. I apologize for that as well, but I have a prior engagement.
Let me get to three or four general points to set the context of my thinking on the proposed Canada-South Korea free trade agreement.
The first contextual point is that the Korean economy has gone through some very significant changes, obviously in the post-war period, but more particularly since the Asian financial crisis of 1997.
While there is much to say about the Asian financial crisis and how it affected Korea, I want to draw your attention to my own observation that, post-crisis, the Korean economy has embarked on what I think is quite an ambitious, though still unfinished, program of economic liberalization and opening up to a world that relies more on market forces and competition externally, as well as domestically, and the liberalization of sectors previously closed to external competition.
At the same time, I think the Korean economy and the Korean people are starting to find their place in the world. You may recall that they joined the OECD in 1996, just prior to the crisis. While the crisis set them back, they are again on track to find their place as one of the leaders of global economic governance.
The fact that Ban Ki-moon is Secretary-General of the UN is I think symptomatic of Korea's ambition to be a player on the global scene. To that extent they are similar, you might say, and perhaps even aspiring to have the kind of role that Canada has seen in global international economic relations.
Lastly, on this first general point of change in the Korean economy and its emergence in the world scene, let me observe also that trade with Korea is growing modestly, and not particularly strongly. The free trade agreement might make a difference to that, but we are seeing very robust exchanges between Canada and Korea in the area of people-to-people contacts. Here in Vancouver I am looking out the window, where I can see the throngs of Vancouverites enjoying the nice weather we have today, and I would suggest that many of them--students, recent immigrants--are from Korea. The affinity that Koreans feel with Canada, for a wide range of reasons, is very strong. These human relationships form a basis for stronger trade, investment, and business ties that can be augmented by an FTA. That's point number one.
Point two is to draw your attention to the context for bilateral negotiations with Korea, and that is the proliferation of free trade agreements we see throughout the Asia Pacific region, but particularly in east Asia. Korea is in the thick of these manoeuvres to sign agreements with neighbouring countries and countries further afield. This is a trend that is not going to go away, whether or not the WTO Doha Round concludes.
The point is to ask if Canada wants to be part of this trend and this phenomenon, where many Asian economies and economies on this side of the Pacific feel the need to enter into formal arrangements to enhance their access to markets in trading partner economies. While many of the deals struck so far among east Asian countries have been weak, and perhaps lacking in detail, we are starting to see a number of deals across the Pacific that look to be much more substantial and that could have a real impact on the economies involved, as well as on third countries, such as Canada. I'm referring of course to the Japan-Mexico deal, the Korea-Chile deal, and the recently concluded Korea-U.S. deal. I'll come back to the Korea-U.S. deal shortly.
Thirdly, as a matter of context again--the committee will know this well, but I hope you'll think about it very hard--is the fact that there has been a conclusion to the U.S.-Korea negotiations. It will be put to Congress. The suggestion is that Congress will allow for an extension of the President's trade promotion authority so the deal can be voted on, on a yes or no basis. If the deal goes through, it will obviously create some benchmarks for any similar Canadian deal, but it will also create the possibility that the Americans might have preferential access to Korea where Canada does not.
Finally, let me say a few quick words on Canadian interest in any potential deal. I'll be very broad here. I'm not an expert on any particular Canada-Korea sector, but I would say we would want to look for as comprehensive a deal as possible. From what we can see of the high-quality deals Korea has signed with Chile and the U.S., this is possible, so we will be looking for across-the-board tariff reductions. We will be looking particularly for tariff reductions, indeed tariff elimination in the so-called sensitive sectors of agriculture, including forestry, seafood products, and so on. It's very important to also make sure there is coverage of non-tariff barriers on both sides, but particularly on the Korean side.
Also, very importantly, because this is the future of the Canadian economy, we need to make sure there are some serious concessions and trade-offs made in the areas of service exports, opening of service markets in Korea, and the transparency of investment regulations in Korea so Canadian companies can gain a foothold in that market.
Thank you, Mr. Chairman.