Thank you, Mr. Chair.
My comments will echo those of my colleague to my left.
First of all, thank you for the opportunity to appear before the committee on this very important hearing.
I'll talk a little bit about the current economic context and why this proposed agreement with Colombia is important, and answer some of the concerns that Canadian companies have right now.
First of all, our association represents manufacturers and exporters in every industrial sector in every province. We have small, medium-sized, and large manufacturing companies as members from across Canada. Together, the sectors we represent are the largest in the Canadian economy, employing over 1.7 million Canadians.
The current economic context we are faced with in the manufacturing sector today is very difficult, as you know. Our members have been heavily impacted by the recession. From July 2008 to about May of this year, our sales have dropped by 28%. If we look year on year, it's about a 20% decline in sales that Canadian manufacturers have experienced. The downturn has been affecting manufacturers and export-dependent companies from every province. If you look at manufacturing sales by province, every province of the country has experienced a significant downturn in sales.
That is rooted in part in the fact that the U.S. economy and the European economy have been heavily impacted by the recession. Our exports to the U.S., for example, are down 31% this year compared to last year. If we look at our exports to major countries or groups of countries, one thing we realize is that developed economies have been heavily impacted by the recession but emerging economies seem to be performing a little better in that context.
What we are seeing, for example, is that while our trade with the United States has declined significantly, our trade with some other regions of the world—for example, Asia and certain Latin American countries—has declined much less. In some cases we have even seen some improvement.
The current challenge for manufacturing and exporting companies throughout the country is that we've had to contend with a very rapid and very significant decline in consumer demand. We are still hopeful that we're going to see a sustainable recovery ahead in the next few months, but there are still some impacts of the recession that are being felt in our sector. Obviously, the appreciation of the Canadian dollar and the strength of the Canadian dollar right now, along with the lack of availability of financing for a lot of companies, are probably the two largest risk factors for a recovery coming ahead in the next few months. Obviously we are concerned with protectionism and lack of trade liberalization with certain markets.
In that context, when we talk to our members about what the nature of the recovery is going to be and how we will ensure that we have a vibrant and dynamic manufacturing sector in the future, and how to ensure we emerge from this recession in better shape, one of the key things that companies are telling us is that we need to develop new markets. Demand is still weak in the U.S. economy. If you look at global trends, one thing we are realizing is that emerging markets are growing much faster, but they are also playing a much more important role in the world economy. That is where Canadian companies need to position themselves. That is where our trade policy needs to go as well, to try to help Canadian companies grow their businesses in these rapidly developing markets.
That's a trend that hasn't started just this year. For example, a few years ago the great majority, over 90%, of our exports were going through the U.S. or directly to U.S. customers, whereas today about three-quarters, 75%, of our exports go to the United States. That is in large part because we have been able to grow our business in other rapidly growing markets.
In terms of Canada-Colombia trade, one thing we've witnessed is that trade between the two countries has grown very rapidly. For example, between 2004 and 2008 our exports to Colombia have grown by 83%. Colombia is a very good example of a market that is growing very rapidly where we have been successful in expanding our presence in that market and responding to some of the needs and demands that they have by supplying them with Canadian products and services.
Also, good news with respect to our trade with Colombia is that we've been exporting a lot more manufactured high value-added goods to that country. In 2004 manufactured goods accounted for about 50% of our exports to Colombia, whereas last year, according to the most recent statistics, 67% of our exports to Colombia consisted of manufactured goods. This is good news, because we've been able to grow our trade not only in agricultural products but also in high value-added manufactured goods.
If we look at this FTA precisely, considering that tariffs on industrial goods average about 11.8% and tariffs on agricultural goods amount to about 16.6%, getting these tariffs removed would improve the competitive position of Canadian exports into that market. Considering what David was saying earlier, that we have other trading partners who are negotiating with Colombia, if we can get that deal passed, and if we can deliver those results to Canadian companies, we're going to be in a much better competitive position going into that market going forward.
To summarize, one thing we're realizing is that more and more of the world's economic growth is going to come from emerging economies such as Colombia's. That's good news, because it means there are new business opportunities for Canadian companies. As Canadian companies are going to look to grow their businesses beyond North American markets, they're going to look at countries like Colombia.
The good news is that Canada's trade policy is aligned with that business priority. We haven't just negotiated with Colombia and Peru, for example, but Canada is currently negotiating with the European Union and other countries around the world as well that want to open trade opportunities for their companies with Canada. I think that's good news for Canadian business and that's good news for the Canadian economy.
I'll conclude here.
Thank you.