Thank you, Mr. Chair.
Good afternoon, everyone.
I can see that there are a few new faces around the table. First, I'd like to introduce the association that I have the privilege of representing here today. Then I will give you a little explanation as to why our association supports the free trade agreement that you are currently studying.
Canadian Manufacturers and Exporters is Canada's largest commercial and industrial association. The association has existed since 1871, and we have members in all industrial sectors in every province. To my knowledge, our association is the only one with permanent representation in Washington, in the United States.
Eighty-five percent of our members are small and medium-sized enterprises across the country, as I said. Just to give you an idea, Canadian manufacturing contributes to 13% of our GDP and to 12% of the workforce. It is a highly diversified sector and very export-oriented. In fact, we export more than half of what we produce. The manufacturing sector accounts for approximately two-thirds of Canada's total exports. So, our sector has an international focus and depends on access to foreign markets to survive, prosper and enjoy commercial success.
We're here today to support the Canada-Panama free trade agreement for a number of reasons. You probably know that manufacturing was the sector most affected by the recession that we have gone through lately. Shipments went down by about 25% from the peak to the bottom of the recession.
Since we've been out of the recession, manufacturing has outpaced other sectors of the economy and is actually growing faster than the rest of our economy. When you look at manufacturing shipments by province, you will see that between now and a year ago, things have improved.
There still remains some considerable challenges, but we're certainly seeing orders pick up, not only in our main market, which is the United States, but also internationally, in other growing, emerging markets.
When we do ask our members what drives business success in manufacturing in Canada going forward, one of the top answers we'll get from most manufacturers, if not the top answer, is around the importance of developing new markets around the world. There are a number of other important factors, whether it's trying to be more innovative with a focus on developing and incorporating new technologies into your business or making better use of the skills and knowledge of people, but I'd say that export and international trade development is at the top of the list.
The more you see manufacturing companies become niche players, more specialized in what they're doing, the more they have to look beyond Canada and North America for customers. This is why trade agreements, such as the Canada-Panama free trade agreement we're looking at today, previous trade agreements that have been ratified by Parliament and the ones still under negotiation, are very important in removing some of the business barriers our members are facing when they go to other markets. They're also very critical to making sure that Canada keeps up with its main trading partners, keeps up with some of our competitors, namely the United States.
In other words, when the United States negotiates and ratifies free trade agreements, we need to be in some ways aligned with what the Americans are doing, but also very strategic, because our sectors and our sensitivities can in some cases be different.
To wrap up, Panama accounts for a very small share of Canada's total exports, but when you look at the numbers, as I know you have, you see it's a growing market for Canadian exporters. Discounting the fact that we have had a recession, I think the long-term trend is that markets such as Panama, which are growing at a better pace than some of our existing customers, represent a wealth of opportunities for Canadian businesses.
In many sectors tariff barriers remain a significant hurdle to doing business in these markets. This agreement, by removing or improving most tariffs paid by Canadian exporters when selling goods to this country, would help Canadian companies to better position their goods and services into this market.
I would say that an increasing share of world economic growth is coming from emerging economies such as Panama. We're seeing a greater share of economic growth, globally, coming from such markets. Canadian businesses are looking to get into these markets. They're facing some tough competition from other parts of the world, and having a free trade agreement is a first step to helping Canadian businesses better position themselves in some of these growing markets.
Obviously more is going to be needed if we want to translate a trade agreement into additional business for Canadian companies. Companies are doing what they need to do to get into these markets, but support from the government and other service partners is going to be essential if we want to do a better job of exporting and engaging in international trade with these growing economies.
I'll stop here. Thank you very much.