Thank you, Mr. Julian, for that question.
In terms of the methodology that we've used in our study, it's fundamentally different from the computable general equilibrium approach that the government has used, and that the government has used in the past to justify other free trade agreements that we were entering into. Our approach has been rooted in historical data. Rather than making particular assumptions about how markets work and equilibrium conditions like full employment and so on, we have simply gone back and looked at the historical record of free trade agreements, how much of an impact they had on exports and imports, and then assumed that the Korean case would be similar to that.
If anything, I'd suggest that's a conservative impact, because we have never signed a free trade agreement with an Asian economy that typifies that very state-directed model of economic development that the Koreans have followed. If anything, I think our experience in Korea will probably be worse than the average, but our model assumes it will just match the average of those other five agreements.
What we find in practice, looking at the history of free trade agreements, is that they have a much larger impact on trade flows than just tariff reduction alone would seem to justify. Tariffs are not that large; they are only 5%, 6%, or 7%, even lower in some industries, so you wouldn't expect the dramatic changes in the wake of a free trade agreement that you actually have seen in our other cases. That suggests that there's a structural change in business strategies, market awareness, and the ability to export to a new market that is quite independent of the size of the tariff in the first place. That's the justification for why you could have a major impact in a sector like computers and electronics that have lower zero tariffs anyway, simply because the structural change in bilateral trade, which is opened up by the free trade agreement, leads to much larger trade flows on the basis of what footprint that trading partner already had in our market.
In terms of how we justified the auto industry case, we did include auto within the broader transportation equipment sector, but we did separately model the vehicles and parts flows. We anticipate a total impact of something like 4,000 lost jobs. Again, this is going to build into it investment reactions to the free trade agreement of the type that the CEO of Ford Canada was hinting at.
Again, the DFAIT study and the Industry Canada and the University of Toronto studies, as well, all assumed there'd be no impact whatsoever on Canadian auto investments as a result of the free trade agreement, and I think that's a very unrealistic assumption.
So our approach takes an actual look at history and assumes that something like that will occur in the Korea case. That's a very different methodology from what any of the government-sponsored studies used.