International Trade Committee on Dec. 6th, 2007

[Ian Burney]

Thank you.

On the second question, it's not an FTA or nothing. Clearly, we pursue a wide range of options in terms of promoting our relationship with Korea, and we do have active programs of trade and investment promotion. We would be pursuing air services negotiations. There are other instruments that we would be pursuing, but that won't solve the problem I mentioned in my presentation about having a competitive playing field vis-à-vis our competitors. That's the reason we're doing an FTA. If the Europeans, the Americans, and everybody else has an FTA with Korea and has tariff-free access, and Canada doesn't, it means on average we're going to face a 13% disadvantage for virtually everything we sell. So that's what we're trying to address with an FTA, and there's no other mechanism for doing that. You cannot, under WTO rules, have sectoral or product-specific agreements that liberalize tariffs. It has to be a comprehensive FTA. So that's the rationale for pursuing that. We don't see it as a situation where we can set aside an FTA and pursue other means to the same end. We aren't going to recover the competitive lost ground with any instrument other than an FTA.

We are negotiating an investment chapter with Korea, and it would be based on the standard model we have, a foreign investment protection agreement, which resembles NAFTA, but of course there have been some improvements and clarifications that have taken place over the years, in part to respond to some stakeholder concerns about chapter 11 that will be incorporated into Canada's new model and which are being pursued with Korea.

[The Vice-Chair, Liberal, John Maloney]

Thank you, Mr. Burney.

We're very close to a bell, but we'll start round two.

Mr. Dhaliwal, you indicated you have a short question.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Sure, if I have time, I'll split with--

[The Vice-Chair, Liberal, John Maloney]

You don't have much time. I think just your question will do it.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Thanks, Mr. Chair.

Non-tariff barriers are critical issues for Canadians in companies' negotiations. If I got it right, you said you have a comprehensive non-tariff barriers list prepared that you don't want to discuss. Is that true? Have you identified those non-tariff barriers?

[Ian Burney]

I said that we were pursuing an aggressive program of measures to address non-tariff barriers in the Korean market. I was reluctant to get into specifics of where individual issues stand in the negotiations because they're all being negotiated.

With respect to the auto sector, there are a number of specific barriers that have been brought to our attention by the auto industry, which we're trying to seek a resolution on with Korea. There are generic provisions that we're trying to put in place. We're trying to open up the standard-setting process in Korea so Canadian companies can have earlier access before standards are presented and they become a fait accompli. We're pursuing a much more aggressive dispute settlement mechanism specific to the auto sector. We're pursuing a range of transparency measures. We're seeking language on an anti-import bias.

So across the board, wherever Canadian companies have identified a specific, non-tariff measure that's a problem for them in Korea, we're taking steps to try to address it. I would say that our efforts are heavily concentrated in the auto sector, but they're not limited to the auto sector.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Basically, you are consulting with the stakeholders and getting their input into the system.

[Ian Burney]

Absolutely. We're governed extensively by our consultations with stakeholders in sectors across the country.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Thank you.

[The Vice-Chair, Liberal, John Maloney]

Thank you very much for your attendance today. I'm sure there are more questions around the table here. We'll continue to hear witnesses, but I would anticipate that we might have you back for perhaps another round.

Thank you very much.

The meeting is adjourned.