Thank you.
On behalf of the member companies of the Forest Products Association of Canada, I'd like to thank you for the opportunity to present to you today.
With mills in almost every province, FPAC's members manufacture a comprehensive line of primary and secondary pulp, paper, wood, and bioproducts. The Canadian forest sector represents 12% of the country's manufacturing GDP, and FPAC members account for about 60% of its total manufacturing capacity. The industry is also one of Canada's largest employers, operating in 200 communities across the country and providing 600,00 direct and indirect jobs.
As you're all aware, the industry has been emerging from one of its most difficult periods in a generation. It became very clear to our members that business as usual was simply not an option. As a result, a significant effort was undertaken to implement an economic competitiveness strategy and rework the business model by improving productivity and competitiveness, diversifying products and markets, building world-class environmental credentials, and looking for ways to produce innovative products from wood fibre. That hard work is beginning to pay off.
Last year, FPAC unveiled vision 2020, an ambitious plan to drive the industry forward with aggressive goals around performance, people, and products. First, we hope to deliver a further 35% improvement in our environmental footprint. Second, we want to renew the workforce by about 60,000 recruits, including women, aboriginals, and new Canadians. Finally, we want to generate an additional $20 billion in economic activity from innovative products and by growing markets.
Vision 2020 builds on all of the hard work of recent years. We've increased our productivity and operating efficiency. We've established world-class environmental credentials that are second to none. We're making technological breakthroughs and producing new innovative products, from cosmetics to clothing to car parts, all made from wood fibre.
Our initial efforts to diversify our markets have been incredibly successful. Canadian wood product exports to China, for example, were $1.4 billion in 2012. That's a dramatic 44 times increase from 2001. If you add pulp and paper to that figure, total forest products become Canada's largest export to China, at over $4 billion. Throughout our transformation, the government has supported the industry as a strategic partner, in particular with initiatives on the trade front: opening up new markets and helping us market Canadian wood products globally.
Canada's forest products industry annually exports nearly $30 billion worth of products to markets around the world, making it one of the countries leading export industries and one of the most successful exporters of forest products globally. The continued expansion of existing markets and diversification into new markets remain an essential component of the industry's economic competitiveness strategy and vision 2020. For this reason, the industry is supportive of the government's trade agenda, including the negotiation of new trade agreements and focused program spending to help secure opportunities in new markets.
The Trans-Pacific partnership presents a unique opportunity to build on our relationship with the United States, our largest export market, and to expand our trading relationship with some of the world's fastest growing economies. As a bloc, TPP countries imported more than $18.3 billion of Canadian wood, pulp, and paper products in 2012. The combined sales of Canadian forest products to TPP countries, not including the United States, amounts to $1.8 billion, making it the industry's third largest market.
The industry's competitive position will be further enhanced by secure and open access to the TPP market as its transformation accelerates and it introduces new biochemicals, biofuels, and biomaterial products to the market. In addition to obvious offensive interests, participating in the TPP will allow the Canadian forest products industry to protect its competitive position, particularly in the critical $1.3 billion Japanese market, where New Zealand and Australia are significant competitors. All told, the TPP represents an important opportunity for the Canadian forest products industry and the communities it supports.
As negotiations proceed, we recommend that the government consider the following points related to forest products.
Several TPP members currently levy tariffs on Canadian pulp, paper, and wood products, ranging anywhere from 1% to 40%. These render Canadian exports uncompetitive vis-à-vis competitors that face a reduced or no-tariff rate on the same product lines. The architecture of the agreement should ensure that non-tariff environmental trade barriers are not used as means of blocking the Canadian industry's access to markets.
Moreover, the deal should recognize as being equal all three forest certification standards that are used in Canada, as well as recognize Canada as a low-risk jurisdiction with respect to illegal logging.
To the greatest extent possible, the agreement should expedite regulatory approvals for the use of Canadian forest derived products in TPP member states, once they have been approved for safe use in Canada. This should apply to solid and engineered wood products, forest fibre derived fuels, chemicals, and specialty products.
Finally, the U.S. Lumber Coalition has pressured the U.S. administration to address NAFTA chapter 19, and elements of Canada's timber pricing and forest management systems as part of the TPP negotiation process. We urge the government to continue to hold firm on chapter 19 and other existing trade remedy protections.
Expanding international trade relationships helps the forest products industry to grow and diversify its markets and products mix. Ultimately, a successful negotiation of the TPP will help sustain Canada's forest communities and the hundreds of thousands of jobs the sector supports across the country.
Thank you once again for the opportunity to be here today.