Very good. Thank you very much.
First of all, the automotive parts manufacturers are the suppliers of parts, goods, and services for new vehicles. We are not in the aftermarket. It's very important to understand that.
I myself have been in the industry since 1964. For some of us Neanderthals, that's prior to the Auto Pact. I lived through the implementation of the Auto Pact at General Motors and I lived through the implementation of the Canada-U.S. Free Trade Agreement and the North American Free Trade Agreement with ITT, and was very active in getting those. In fact, we say that those agreements, all of them, have been very good for the automotive industry in Canada.
But the Canada-Korea Free Trade Agreement will not be. So we are, by nature, promoters of free trade where there is fair trade, but we have to make sure that it is fair trade.
On the environmental assessment that was previously mentioned, we don't think it's a very good assessment. There's a lot of uncertainty in it and it cannot be relied on. As an example, on page 26, it says that the increase will displace other imports of similar-class vehicles. In fact, we don't believe this is the case. It's a very bold assessment and it's completely wrong. One of the CVMA studies, which my colleague put out, shows that Canada and Korea do make similar vehicles, so Korea will be replacing Canadian-made vehicles, not other vehicles.
Also, on page 11, 1990 data is being used. Now, auto parts at that time was a $12 billion industry; we're now over a $32 billion industry. And that was three generations of automotive cars ago. Vehicles were 13 times more polluting then than they are now. So this data from 1990 is absolutely useless.
On page 17, the report assumes that the Korean products will come from Korean operations in the U.S. As said previously, this would only be true if you maintained the duty. But if there's no duty, then you have a free hand regarding where it will come from. And the assumption is that the Korean companies are like the Japanese companies. This is an incredible lack of knowledge of the North American market. When the Japanese companies came here in 1980s, we had the big three with 80% of the market. Volkswagen was the biggest importer at the time. Today, we now have the big three with about 50%, Toyota as number two, and a completely, completely different market than there was then, with lots and lots of competition.
So what we do know, from our auto shows, is that the Koreans are designing bigger vehicles, more luxurious, and in fact the same kinds of vehicles as we make now in Canada. Eliminating the tariffs is going to be tremendously damaging to our domestic manufacturers.
The operations the Koreans have built are in the southeastern United States. We predict that their production is going to go from about a quarter of a million units to about three-quarters of a million units by 2012. There are no benefits to Canadian workers for these locations because they're too far. Some Canadian manufacturers will in fact benefit, but they will have to build plants down in the southeastern U.S. But again, the Canada-Korea Free Trade Agreement is irrelevant to this. This will happen because of NAFTA, not because of any deal with Korea.
Nothing in the assessment will impact on the automotive OE suppliers--that is us--it's only on vehicle manufacturers. But I can tell you, as goes the OEM, so goes the suppliers. A 10-hour truck drive is the magic number for us. If it's 10 hours away, we can supply, and that means we can supply Ohio, Kentucky--in other words, Honda, Toyota, and Nissan. We cannot supply the southeastern U.S.; we have to build new plants there.
In the past, the Koreans have proven that they have the ability to impose significant non-tariff barriers. Until they prove to us that they have removed non-tariff barriers, we should not be signing a free trade agreement with them.
It's time for Canada not to be boy scouts. The Canadian market is a market they want to get into. In order to get into the market, they're going to have to prove their worth and the fact that they can be fair and free traders, like we are. Until they prove it, we should not sign the agreement.
Thank you.