Evidence of meeting #36 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was agreement.
A recording is available from Parliament.
Conservative
Devinder Shory Conservative Calgary Northeast, AB
My colleague Mr. Cannan talked about some tariffs on pork production—
Conservative
Devinder Shory Conservative Calgary Northeast, AB
Quickly, Mr. Burney, I'm from Alberta and I know that the reduction in tariffs will be 30% on pork products and up to 72% on beef products. Could you tell us whether you expect these reductions would be implemented as well as how these reductions would affect Alberta's hog and beef industry?
Conservative
The Chair Conservative Randy Hoback
Actually, Mr. Shory, we'll have to move on to the next questioner.
Conservative
The Chair Conservative Randy Hoback
If you could submit that to him in writing, that may be appropriate.
Mr. Morin.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
Mr. Burney, Canada's hog and beef cattle farmers suffered significant losses when Korea signed agreements with their competitors. So did the aerospace sector.
Have you done any estimates on what those losses represent for Canadian exporters? Our competitors have the advantage; what is that costing us?
September 30th, 2014 / 5:20 p.m.
Assistant Deputy Minister, Trade Policy and Negotiations Branch, Department of Foreign Affairs, Trade and Development
Thank you for the question.
As far as pork is concerned, we lost nearly half the market we had in 2011. Denis can give you more details on that.
It was a different story in the beef industry. We lost that market because of the mad cow crisis 10 years ago. It takes time to rebuild a market. But that is hard to do when there is a difference in tariffs and no free trade agreement in place. Thanks to the agreement, we have a chance to re-establish our beef export market in Korea.
Now I'll turn it over to Denis.
Director and Lead Negotiator, Regional and Bilateral Agreements, Trade Negotiations Division, Market and Industry Services Branch, Agriculture and Agri-Food Canada , Department of Foreign Affairs, Trade and Development
The pork industry is quite robust. It's a very significant market. Pork is one of our main export markets. Since our free trade agreements with the U.S. and Europe came into force, our pork exports have fluctuated a lot. Our exports rose as a result of an epidemic that affected Korea's pork market. Beef and hog farmers are telling us they are at a disadvantage when it comes to their competition in the U.S. and Europe. In the medium and long terms, they expect their market share to decrease. They feel very strongly about the need to fix the situation so they can once again be competitive.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
Mr. Burney, what barriers will our exporters face when trying to regain lost market shares? Time also plays a role. No doubt, they still have ties with their customers there. Are there other barriers they will face, or do they simply have to be patient? Will they need the government's help when it comes to re-establishing contact with people there and building new ties to make up for their losses?
Assistant Deputy Minister, Trade Policy and Negotiations Branch, Department of Foreign Affairs, Trade and Development
For the time being, tariffs and the differences between Canadian and American products are the only problem. The Korean market is very receptive to Canadian goods, as they are considered to be of very high quality. There is no issue with that. To my knowledge, no non-tariff barriers exist in the market at the moment. Denis might be able to elaborate on that.
What's important is for Canada to be on equal footing with other countries as far as tariffs go. And that will happen the day the agreement comes into force. At that point, we will see tariffs drop.
Director and Lead Negotiator, Regional and Bilateral Agreements, Trade Negotiations Division, Market and Industry Services Branch, Agriculture and Agri-Food Canada , Department of Foreign Affairs, Trade and Development
Indeed, right now, the biggest factor is the tariff differential. Based on what those sectors are telling us, a slight difference exists between Canadian prices and those of their U.S. and European competitors, and that is having a big impact.
NDP
Marc-André Morin NDP Laurentides—Labelle, QC
Mr. Landreville, I know the Japanese have extremely demanding sanitary standards. We are wondering—
Conservative
The Chair Conservative Randy Hoback
I'm sorry, but we're going to have to finish there, Mr. Morin. We have to move on to the next questioner.
Mr. O'Toole, please.
Conservative
Erin O'Toole Conservative Durham, ON
Mr. Chair, I have a quick question, and if I have any time left, I'll share it with Mr. Richards.
I'm following on Madam Liu's questions on aerospace specifically. When I was in Seoul last month, pushing deal ratification on their end, I had the opportunity to tour CAE's facility near Incheon. It's a major investment on their part to build a hub there, not just for Korean Air Lines but for some of the others in the charter industry serving Southeast Asia and the rising trends there.
I know that for flight simulators there's a 5% tariff reduction. It's an important part of our aerospace industry. Mr. Burney, can you talk about some of the investments that companies like that might make in South Korea to use that as a springboard to serve the wider Asian economy? Do you know of any other companies that would be taking advantage of it like this?
Assistant Deputy Minister, Trade Policy and Negotiations Branch, Department of Foreign Affairs, Trade and Development
I think that's exactly the kind of increased interaction we would like to see generated by this agreement.
In the aerospace sector, I'm not aware of other investments at the moment. There may be. We can certainly check our information and get back to you on that. I know that in auto parts sector, for example, we have a major investment presence in the Korean market. Magna, I believe, has five facilities already serving the burgeoning Korean auto industry, and I think that's possible in a wide variety of other sectors.
Our investment numbers for the moment are not all that high, but there are significant opportunities.
Bombardier has been involved in a major LRT project on the outskirts of Seoul, and it's now a service provider for that on a long-term basis. I think it has also had some success in terms of the sales of airplanes.
Korea will be a tremendous growth market for I think a whole range of aeronautics products going forward, but on the specific business decisions that companies make as to whether to serve a market on an export basis or to invest in a market, that will vary very much from sector to sector.
Conservative
The Chair Conservative Randy Hoback
I'm going to have to step in. It's 5:25 p.m., Mr. O'Toole, so I'm going to suspend this meeting for a minute so we can clear the room. Then we'll go in camera and discuss moving further. We'll suspend this meeting for now.
[Proceedings continue in camera]