Good morning. My name is Martin Sullivan. I'm the CEO of Ocean Choice International. Thanks for the invitation to appear before the committee and share our thoughts on the TPP.
First of all, I'd like to give you a little overview of our company, and then I'll give you our perspective on the TPP.
OCI, as we're commonly known, is a family-owned company based here in Newfoundland with operations in the Maritimes as well. We employ about 1,700 people on an annual basis, with most of them in Newfoundland, and others in the Maritimes and in sales offices around the world. We also buy fish from over 1,400 fishers here in the province. The total payroll for both fishers and employees is about $130 million per year. We operate six processing facilities and six offshore vessels in Atlantic Canada.
In our global sales and marketing network, we sell about 80 million pounds of seafood, and that's 20 different species, to more than 400 customers in over 30 countries. We have sales offices in six countries. We've invested heavily to try to maximize the value of all the products we sell.
Our annual sales are about $280 million Canadian, with about one third each to North America, Europe, and Asia. We are strong proponents of sustainable science-based fisheries and we engage regularly with DFO with respect to science and research on many species. About 90% of our seafood is either certified by the Marine Stewardship Council or is in the process of being certified.
With respect to the Trans-Pacific Partnership, we believe opening up trade opportunities like this for our industry is extremely important, as our industry relies on trade for its existence. We believe trade agreements like this are an important factor in increasing the size of the economic pie and will lead to increased returns for all participants. Too often we engage in battles over sharing a smaller economic pie rather than trying to work together to increase the economic pie so that all participants can experience a better return.
As you know, the TPP is a major trade initiative involving 12 countries, including seven new free trade agreement partner countries, with a combined market of nearly 800 million people and a GDP of almost $29 trillion. The biggest incremental opportunity for us is in the Asia-Pacific region. Our company currently sells in six of the 12 countries in the TPP, and we see many opportunities to increase sales in those six countries and expand to many of the others.
We have seen from past trade agreements the tremendous opportunities and extra value that resulted after implementation. The lower tariffs will lead to increased opportunities and make the Canadian seafood sector much more competitive in the international marketplace. This is especially true when you look at competitors in countries such as China, Russia, South Korea, and Thailand, which are not part of the TPP.
In this particular agreement we will see tariff reductions on many species that are important to Newfoundland and Labrador and the rest of Atlantic Canada. This includes snow crab sold to Japan. We'll see the elimination of the 4% tariff come into force immediately upon entry. There will be an elimination of the 5.3% duty on shrimp and processed shrimp into Japan immediately, which will provide more opportunities for our cooked and peeled shrimp sector. There will be a reduction or an elimination of tariffs on lobster in several of the TPP countries. The 15% tariff on scallops to Japan will be eliminated over 10 years, and on frozen fillets tariffs it will either be reduced or eliminated.
For a country like Malaysia, all tariffs will be eliminated immediately, which will open a lot of new opportunities for our seafood.
There are many other examples too numerous to outline in detail here. We will also have strong provisions on non-tariff measures, which are important with respect to dispute settlement provisions.
As an industry, we've experienced the benefits that trade liberalization can provide and the huge impact it has on the incomes in our sector. This is particularly true in rural areas, which is where most of our employees and fishers who supply us live. When you combine the reduced tariff access, as well as the resulting new market opportunities in these countries for many new product forms, there are many examples where it has led to increased prosperity for our people and communities. For example, on snow crab, which is important to Newfoundland and certainly to the other maritime provinces as well, we have seen the expansion to Asia, and particularly to Japan in addition to the traditional U.S. market, resulting in significant price increases to fishers, this year, in the range of $3 a pound. I can remember when we were paying 35ยข a pound in the 1990s before we had some of these trade agreements in place. This has meant significantly more money in the economy of rural Atlantic Canada, and on other species we have seen similar results.
As we expand tariff-free access, we open up whole new markets to buy various product forms that add significant value to our industry and result in a larger economic pie shared by all participants. For example, we may get the best value from fillets in the U.S. market, raw crab sections and parts in Japan, whole fish in China, raw scallops in Australia, and headed and gutted fish in southern Europe. Each market has its own unique culture and tradition of eating fish in different ways than we're used to. As we expand our free trade agreements to more countries, we bring back significant value to Canada. We believe this has a very positive impact on incomes for people in the industry, and greatly enhances the communities in which they live.
In conclusion, we strongly support the TPP, we strongly support lower tariffs and better market access, and we encourage Canada to finalize and implement this very import trade agreement.
Thank you.