Mr. Speaker, let me begin by thanking my hon. colleague from Sackville—Eastern Shore for his interest in the government's efforts to expand export opportunities for Canadian businesses along with the potential impact of trade liberalization on Canada's shipbuilding industry.
The government shares the hon. member's interest. We recognize that some within the ships industry may be sensitive to the removal of Canadian tariffs in the context of our ongoing FTA negotiations with the EFTA countries, those being Iceland, Norway, Switzerland and Liechtenstein, as well as with South Korea. This is why we have consulted with and involved all interested stakeholders from coast to coast, including shipbuilders and ship owners since trade negotiations with Korea and the EFTA countries of Europe were first launched.
As a result of these consultations the government has, to the greatest extent possible, reflected industry's concerns in the negotiations. I can assure the hon. member that Canada's negotiators are doing their utmost to effectively address their concerns.
However, it is important that the hon. member also understand that the competitive challenges facing this industry have existed for a number of years and go beyond both these various trade initiatives and trade liberalizations more generally.
I will address how we are dealing with ships in our negotiations in more detail, but first I wish to elaborate on the overall merits of free trade on Canada's economy as a whole.
The hon. member is surely well aware of the importance that trade plays in Canada's economy, contributing to over 40% of Canada's gross domestic product. Indeed, one in five Canadian jobs is supported by trade.
In Advantage Canada, the government's plan to strengthen Canada's economy and make it more competitive, we made clear our determination to pursue bilateral free trade agreements with targeted countries. Canada is unfortunately lagging significantly behind its key competitors, not having concluded a single FTA since 2001. Since then Canada's main competitors, including the U.S. and the EU, have been aggressive in their negotiations of free trade agreements.
The U.S., for example, has successfully concluded free trade agreements with 15 countries since Canada concluded an FTA six years ago. In fact, Canada is the only significant trading nation in the world that has not concluded a comprehensive free trade agreement in the last five years.
Canada must do more to level the playing field vis-à-vis its competitors. We must ensure that Canadian exporters and investors have competitive terms of access to international markets. We cannot stand idly by on the sidelines while our competitors negotiate FTAs all around us. Canada must do more to bring trade barriers down in order to better position Canadian businesses for success. Canada is very much part of a global economy and it cannot shelter itself from increasing competition nor can it neglect opportunities.
The EFTA countries are developed modern economies that offer significant opportunities for Canadian businesses. Combined, the EFTA countries represent Canada's eighth largest merchandise export destination. An agreement with EFTA would be Canada's first transatlantic free trade agreement and would provide a strategic platform to expand commercial ties throughout Europe.
It would further offer advantages to Canadian businesses over key competitors such as the U.S. and would put Canada on an equal footing with other nations that already have FTAs with the EFTA countries, such as Mexico, Chile, Korea and the EU. A free trade agreement with EFTA countries also offers potential gains for Canadian industry and several industrial and agricultural sectors.
South Korea is another valuable trading partner for Canada and represents a gateway to northeast Asia, a region of strategic importance to global value chains. In 2006 Korea was Canada's seventh largest trading partner, with Canadian exports totalling a record $3.3 billion. A free trade agreement with Korea would offer the possibility of enhanced market access for a wide range of Canadian goods, services and investment opportunities--