Debates of Oct. 27th, 2014

Canada-Korea Economic Growth and Prosperity Act

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like to thank the hard-working member for Newmarket—Aurora for joining us again. The last time she intervened in my speech at second reading, she shared a very personal story about her family's service and her relative, whose name is one of the 516 names on the monument where I laid a wreath. Moments like that bring all members of the House together, particularly after last week.

Sharing our own perspectives and those of 200,000 Korean Canadians is critical. Several from the Vancouver area appeared before the trade committee. Their perspectives have been critical in getting us to this stage. I have mentioned a few people individually over my two speeches on this bill, but that has been the evolution of the relationship between our countries. It was our commitment to the Korean War, and then it was increasingly the people-to-people connections.

As well, it is the educational component. Many people from South Korea come to our fantastic universities and colleges across the country, and increasingly our young university graduates going to teach English in Seoul and other regions of South Korea.

We cannot create these types of bonds at a government level. It is a real enhancer and it will only increase once this agreement is in place.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I will have the opportunity to speak to this tomorrow morning. It is a pleasure to hear today's debate and participate in it.

I would like to reiterate that the NDP supports free trade agreements with democratic countries such as South Korea. It could be excellent news for various sectors, including the aerospace industry, which is very important to my riding.

The NDP uses a number of criteria to assess free trade agreements. The agreement has to be beneficial to Canada, and it must be concluded with a democratic country that has very rigorous regulations governing the environment and human rights.

I would like to ask the government why it chose to negotiate a free trade agreement with a country like Honduras, whose economy is approximately equal to that of the Ottawa-Gatineau region? The current government there is not doing anything to address the fact that journalists are being murdered. Leaders and workers are also being murdered there. Why did the government choose to negotiate a free trade agreement with a country like Honduras?

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, the member for Rivière-des-Mille-Îles is a nice addition to our trade committee. It is clear that she does not want to talk about this great agreement, so she is talking about something else. She has learned the art of politics already, I see. However, I am glad she raised this point.

It is critical to note that trade is a way to engage countries. Countless witnesses at the trade committee and even some of the people from Honduras who are working on missing people said, as my NDP friends would have to admit, that these countries cannot be excluded from the global community. Engagement leads to more democracy, more institution-building, and a better life. When we were working on the Honduras agreement, we heard the choices people had: either narcotrafficking, or potentially working with global exporters in countries trying to invest in that country.

We can just ignore these problems, or we can engage. We are also investing to help strengthen that country's judicial and investigative systems to make sure that crimes are punished.

We on this side of the House choose engagement. We choose to give people stricken by poverty in these countries an opportunity to provide for their families. That will lead to better choices. When we also target our aid through the strategic economic diplomacy that I am proud to be a part of, we are helping them to improve their institutions as we give people on the ground more economic opportunities. I am proud of all of our deals, large and small.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I wonder if we can get some sense of the government's current approach to investor state agreements.

The hon. member will know that the Green Party opposes them in any context, but there is a vast difference between the draft text on the proposed CETA and this Canada-Korea agreement. CETA is obviously an attempt to appease European parliamentarians who do not want it in any way, shape, or form. It is much more open. It allows the public to attend.

I am wondering if my hon. colleague has any comments on the differences.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, it is always good to debate with my friend, the member for Saanich—Gulf Islands. I was hoping for a moment that we might hear briefly from the Liberal trade critic. Perhaps we will next time.

ISDS, or investor state dispute settlement programs, are critical within these agreements, and there is a reason for the difference between the two. Countries of the European Union have fairly long histories and well-developed legal systems, whether common law or civil law, both of which Canada has, and they have certain expectations with respect to having all parties agree as to where a dispute will be settled and under what sorts of laws or what regime. That is very common in commercial dealings.

It is different in emerging countries, particularly in Asia. Our friends in South Korea talked about their development and about how their judicial system has a different path and less of a timeline. These countries should come to a slightly different agreement with respect to their dispute settlement.

Pointing out differences just recognizes that there are different expectations among countries, but both parties agree, as in any agreement.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it is a privilege to stand in the House to speak on behalf of the official opposition New Democratic Party on Bill C-41, which is an act to implement the Canada-South Korea trade agreement. Once again, on behalf of the New Democrats, it is also a privilege to stand and support this agreement. There is no question that the overwhelming evidence is that this agreement is not just of net comprehensive benefit to Canada, but, in my opinion, it is of significant benefit to the Canadian economy, and that includes Canadian workers.

The Canada-Korea trade agreement is also a critical opportunity for the Canadian economy, which we simply cannot afford to miss. As has been pointed out in the House before at second reading, we do not negotiate in a vacuum. The Canada-South Korea negotiations for a trade agreement took place in the context of other trade agreements being negotiated, notably the United States and the European Union, both of which concluded trade agreements with South Korea before Canada did, in 2011 and 2012 respectively.

That means that businesses in the United States and the European Union both had access to reduced tariffs that Canadian businesses have not had. Since those agreements have been in place over the last two and three years respectively, Canadian businesses, sector after sector, have told our committee that they are losing market share in South Korea as a result.

It is our opinion that even if we wanted to oppose the agreement, the context is such that we could not, because Canadian businesses simply cannot compete in a world where their competitors are getting tariff reductions that they are not. I might also point out that Australia, which is a very direct competitor to Canadian producers in a number of areas, has also just concluded an agreement with South Korea.

I will be talking about this at the end, but I also want to point out that New Democrats have a coherent and well-thought-out lens through which we evaluate trade agreements. This is unlike the Conservative government, which seems to support trade agreements with anybody at any time, regardless of what is in them, or the Liberal Party, which opportunistically will support an agreement and then not talk about it.

We asked ourselves a number of important questions. New Democrats asked first of all what characterizes our proposed trade partner: Who is our proposed trade partner? Can it be said that they are a modern democracy with respect to the rule of law, democracy, and human rights? Or, if there are challenges in that regard, can it be said that they are on a positive trajectory?

Second, is the economy of strategic or significant value to Canada? The Conservative government has been a broken record in terms of bragging about the agreements it has signed over the last six years. However, most, if not all, of those agreements have been, with the greatest of respect, economies that have very little trade with Canada and do not have significant or strategic value to our economy. These are countries like Honduras, Panama, and Jordan. As important as these countries are, and as important as it is to have good relations with these countries, I do not think anyone is going to delude themselves into thinking that trade agreements with those countries are going to have a significant impact on the Canadian economy.

South Korea is different in that regard. South Korea is a member of the G20. It is the fifteenth-largest economy in the G20. It is a multi-party democracy with robust rule of law. It has the highest post-secondary participation rate of any country in the OECD. Canada and South Korea are complementary economies. That is an important point. In most respects our sectors are not in direct competition with each other, and our economies are mutually beneficial.

South Korea is also a world leader in green technology, in renewable energy and energy conservation.

I will repeat what I asked in my question to the hon. parliamentary secretary. South Korea has dedicated 2% of its GDP per year to the green technology sector. South Korea is a trillion-dollar economy annually. That translates into $20 billion a year that South Korea is investing in what is clearly an economic direction for the future.

One of the many reasons that New Democrats believe this agreement has the capacity to be very positive for our economy is because New Democrats believe that, wherever we can, the Canadian economy should be steered in a direction where we are replacing outmoded forms of energy, polluting forms of energy, with sustainable ones.

Canadians often see a lot of rancour, discussion, debate, and argument back and forth in this House. They often do not see when Parliament works in a positive way. This is one example where it has, with all parties on the trade committee participating in the deliberations of this important agreement.

Canadians may know that after second reading in this House, and after a vote, then legislation goes to a committee. In this case, this agreement went to the international trade committee where we debated the legislation. We importantly called and heard from witnesses about their points of view on this legislation. We also had an opportunity to propose amendments.

The New Democrats were the only party that proposed amendments at second reading. Neither the Liberals nor any other party proposed any amendments. I will be talking about that in a moment. I think those amendments would have strengthened this agreement.

MPs heard testimony during the committee that was very favourable to the agreement. In fairness, we heard some testimony that was not favourable. We also heard testimony prescribing next steps for the Canadian government and exporters, as we seek to realize the full potential created by this deal both for Canadian enterprises and workers.

On behalf of the New Democratic Party, I would like to thank the witnesses for their efforts in raising awareness about different components of the deal and its impact on their sectors. It added some very important information for us as parliamentarians, and I want to highlight some of that evidence.

The testimony that we heard essentially amounted to a strong exhortation that the federal government have this agreement in place before January 1. As I stated, the context in which we evaluated this deal is one where we have competitive agreements and competitors around the world who are beating us to the market because of the tariff reductions they are enjoying and that Canadian producers are not. We also heard from sectors that believe this agreement may present challenges for them.

In an effort to strengthen the deal for Canada, and consistent with some of those suggestions from witnesses, New Democrats moved a number of common sense amendments to address those concerns. We are somewhat disappointed that the Conservative government was unwilling to work with the opposition to strengthen the deal. They rejected all six of our amendments. Nevertheless, the NDP will continue to offer concrete proposals to ensure that the full potential of this deal is reached and that Canadian businesses and workers benefit.

Committee members were privileged to hear the testimony of the chief negotiator for Canada in these talks, Mr. Ian Burney, who very clearly and succinctly unpacked the many components of the trade deal and articulated their significance for the Canadian economy. Here are some highlights of his testimony.

The outcomes are particularly advantageous for Canada when you consider that Korean tariffs are on average three times higher than ours, 13.3% versus 4.3%. [...] For example, in the sensitive fish and seafood sector, where Korean tariffs run as high as nearly 50%, we've obtained faster tariff elimination.... In agriculture, Korea's most heavily protected sector, with tariffs approaching 900%, we've achieved better outcomes than our competitors.... There will also be major benefits across industrial and manufacturing sectors in Canada, including aerospace, rail, information technology goods, chemicals, and pharmaceuticals to name a few, where Korean tariffs can run up to 13%.

Mr. Burney, primarily in answer to questions raised by the New Democrats, addressed concerns about the impact of the deal on Canada's auto sector. Here is some of his perspective on the matter. He pointed out the following:

...most Canadian production, in fact, almost 90% last year, is exported and so will be unaffected by the increased competition in the Canadian market. Moreover, Korean-branded cars sold in Canada are, as you know, increasingly coming in from plants in the U.S. duty-free under NAFTA. That volume is already close to 50%, so the protection afforded by the tariff is declining in any event.

I would point out that we also have information that Hyundai is opening two auto plants in Mexico in the next two years, an assembly plant and a parts plant, which would be capable of producing several hundred thousand units a year. Therefore, that 50% vehicle entry into Canada from Korean manufacturers is no doubt going to go up.

Mr. Burney continued:

With respect to the Korean market, [where] it remains challenging, there is no doubt it is opening up. Imported auto sales in Korea have been growing at about 30% annually over the last four years. The import penetration rate has increased from about 3% when our negotiations started to over 12% today, meaning that nowadays one in eight cars sold in Korea is an imported vehicle.

New Democrats believe that trajectory has to be watched carefully so we can ensure that Canadian auto products do indeed have access to the Korean market, which up to now has been identified as one of the more closed markets in the world.

The NDP is also proud to join the United Food and Commercial Workers, Canada's largest private sector union, in supporting the Korea trade agreement and its positive potential for tens of thousands of unionized workers in Canada.

Here are some of the words of UFCW legislative director Bob Linton:

UFCW Canada believes that the Canada-Korea free trade agreement overall will be a good deal for Canadian workers.... Korea is heavily dependent on food imports with a demand exceeding $28 billion annually. Korea is Canada's fifth largest agricultural food export market. It has a population of 50 million relatively high-income citizens....

He continues:

Furthermore, increasing trade with Korea and other similar countries is a crucial step [in] diversifying our export industries, reducing risks and dependence on the...U.S. economy.

He also said:

This agreement means that not only members at our locals in Quebec, such as Local 1991, and Ontario, Local 175, will benefit from this free trade agreement but locals in Alberta, such as Local 1118 and 401, and Saskatchewan, Local 1400, will also have the potential to benefit. This deal will not only help to protect the jobs of our members in these provinces but has the potential to increase employment with good union paying jobs that benefit the communities.

Committee members also heard testimony from business and community leaders in Canada's vibrant Korean-Canadian community. Two witnesses I was privileged to put on the list were from British Columbia, Mr. Mike Suk and Mr. David Lee, who described to committee the potential benefits that this deal could bring to the Korean-Canadian community.

Here is a highlight of the testimony by Mike Suk, president of the Korean Cultural Heritage Society:

In less than 60 years South Korea has made its mark on the world stage. Cutting-edge industries have developed in Korea. Korea has also emerged as an influential tastemaker in Asia. I believe companies in Canada, through joint ventures with South Korea, [businesses] will gain favourable access to other high-growth emerging markets in Asia.

I would point out that this is Canada's very first trade agreement with an Asian country. This is another salient factor that went into the New Democrats' decision to support the agreement. Not only does this represent the so-called Asian pivot, where it is important for Canada's economy to establish strong and deep and broad economic relations with Asian economies, but Korea also represents an important gateway opportunity. We will penetrate the Korean market that provides opportunities for us to access the broader Asian market as well.

I want to talk very briefly about the amendments that the New Democrats proposed, which we felt would strengthen the agreement.

Our first amendment would amend the bill to add a clear preservation of the right of Canadian governments to legislate and regulate in the public interest. By way of brief explanation, the New Democrats do not believe that investor state provisions ought to be put into free trade agreements.

In this case, if an investor state agreement is put into an agreement, then we would like a crystal clear and explicit statement in that agreement that nothing in that trade agreement, but nothing, would trump the sovereignty of the states involved to legislate or regulate in the public interest. That is not clearly set out in the bill, and we thought it ought to be.

The second amendment would amend the bill to explicitly prohibit the weakening of environmental standards in order to attract foreign investment.

In fairness to the agreement, it does have a significant amount of language on the environment. However, in our view, when it comes to the environment, we cannot be clear enough. No trade should be facilitated, ever, by a diminution or reduction in environmental standards, and Canada should say so directly in each and every trade agreement that it signs.

The third amendment amends the bill to repeal the investor state dispute settlement chapter from the agreement. As my hon. colleague, the parliamentary secretary stated, Korea and Canada both have robust, mature judicial systems. There is absolutely no rational basis for including an investor state provision in an agreement when investors have full protection and recourse to the judiciaries of both countries to protect their investments and business interests.

Our fourth amendment would amend the bill to require annual Canadian trade missions to Korea to monitor the elimination of discriminatory non-tariff barriers and the implementation of the agreement and report back to Parliament annually. Every single auto company has told us that South Korea has historically utilized a series of non-tariff measures. We could fail to experience any benefits of a trade agreement if a country does two things: if it implements non-tariff barriers and if it manipulates its currency. It could wipe out any potential benefits that a trade agreement would give us by tariff elimination.

The New Democrats, quite thoughtfully and reasonably, suggested that we go every year, at least upon implementation of this agreement, perhaps the first five years, and take representatives of all industries and labour with us and monitor the non-tariff barriers of South Korea to ensure that companies in our country do get the benefit of this agreement. Unfortunately, the Conservatives chose to vote against that thoughtful amendment.

Our fifth amendment would amend the bill to require the inclusion of a snap-back provision for Canadian auto and steel tariffs in the event of a surge in vehicle imports or steel imports from the Republic of Korea. We have heard different testimony on this. I remain of the opinion that we should get what the U.S. got in its agreement with South Korea, which was a snap-back provision. What that means is that if it was found over a period time South Korea market access was not being realized, or it was found there was a dumping of South Korean imports into, in that case, the United States, the tariffs would snap back to protect the domestic industry. We thought the Canadian steel and auto sector ought to have the same protection that their colleagues in the U.S. have.

The sixth amendment is the one that is specifically on steel. Unfortunately, the Conservatives voted down each one of those amendments. I am disappointed that they did.

At the same time, I want to mention that South Korea has been identified in the past as one of those jurisdictions that has been accused of intervening in its currency to artificially suppress its currency level as a means of boosting its exports. I make no such accusations in this regard, but that has been identified.

New Democrats, before committee, announced to Canada that we would be proposing the following motion at committee to address this major trade barrier, which is currency manipulation. It reads:

That, pursuant to Standing Order 108(2), the Committee undertake a study of the use of currency intervention by states throughout the world to create advantages in international trade, policy options available to address unfair currency interventions, and report its findings back to the House. The focus of this study should include: a) Investigating the challenges and opportunities in using trade and investment agreements to address currency intervention; b) examining the status of progress at multilateral bodies in developing fair international rules on currency intervention; and c) balancing respect for sovereign nations in the management of their monetary policy with the development of fair international rules to level the playing field for exporters in all countries.

People as diverse as the U.S. manufacturers association, the Canadian Council of Chief Executives, Ford Canada and any number of people involved in import and export understand the importance of currency in expanded trade opportunities. Regrettably, our motion will not be studied, at least now, before our committee. That is disappointing as well because we think that having a stable and fair currency trading system is key to establishing a smart trade policy for Canada.

Canada is a trading nation. We have always been a trading nation. We continue to be a trading nation. New Democrats will continue to suggest intelligent, thoughtful and prudent measures that will not only boost exports for Canadian champions around the world but also make sure that we can create those value-added, good-paying jobs here at home that are the hallmark of every modern industrial economy.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I thank my hon. colleague, the trade critic for the official opposition. I am pleased to hear him say that he prefers not to see investor state agreements in trade agreements, but they are now becoming all too common.

The ratification of the Canada-China investment treaty, which is certainly the most egregious of all of them, will lock Canada in for the next 31 years. In that instance, we have an investor state agreement where the entire process is secret. The first six months involve private diplomatic wrangling. It significantly undermines Canada's sovereignty to have an agreement like that ratified.

We have had different gradations of investor state agreements ever since the first one with NAFTA and chapter 11. Therefore, how can the official opposition vote for this trade treaty even though it does ensnare us in yet another investor state agreement?

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, that is a very thoughtful question that I think deserves a thoughtful answer.

The New Democrats believe that each trade agreement has to be evaluated on its own merits. We have to identify the partner involved and we have to look at the agreement itself. There are some profound and significant differences between the investor state provision in the South Korea agreement and the one my hon. colleague talked about with respect to the Canada-China FIPA.

For one thing, the Canada-China FIPA investor state provision would bind Canada for 31 years. The Korean agreement is six months.

Second, the Canada-China FIPA permits either sued party, whether China or Canada, to have the tribunal hearings held in camera, in secret, thereby avoiding one of the hallmarks of the rule of law, which is open public court proceedings. The South Korean agreement explicitly requires that investor state proceedings are to be made in public, using the word “shall”.

Finally, China is, of course, a very different country than South Korea. China is a command economy and a major capital exporter, whereas South Korea is an open market economy that has been on a trade liberalization regime for quite some time. The concerns about state enterprises or South Korea using the power of its state interests to further its interests in Canada's sensitive sectors are not quite the same.

However, the member is quite right that a New Democratic government, and it is our party policy, would not negotiate agreements with investor state provisions. We do not think they are necessary. That is why the New Democrats believe that the South Korea agreement must be monitored very closely. If it turns out that the investor state provisions are being abused in the South Korea agreement, New Democrats would not hesitate to invoke the cancellation provisions of South Korea, which would end the agreement on six-months notice, and it would not have any further binding effect after that time.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, I want to say how pleasant it is to be in the House and hear that the NDP are supporting a free trade agreement. It is very refreshing.

My colleague spoke quite eloquently about some of the opportunities that he sees across Canada. He also spoke about some of the witnesses before committee. I was not there, so I have not had the benefit of their testimony. I wonder if the member could inform the House of the things that he sees as possibilities for job creation and opportunities for businesses in his own riding.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I thank my hon. colleague for the kind words. As she said it was refreshing to see New Democrats vote for a trade agreement, I would like to see the government support a child care program. Perhaps we can mutually improve this country by working together on some important policy areas.

I come from Vancouver and my riding is Vancouver Kingsway. Of course, British Columbia is Canada's Pacific province and we have a very strong orientation towards the Asia-Pacific. This is something that I think is sometimes not recognized quite as much as it ought to be in Ontario and Quebec, who tend to be South America, European or American focused. However, the opportunities for British Columbia, and Canada through British Columbia, to build strong economic relations as well as cultural, social and political bonds with South Korea and other important countries in the Asia-Pacific region are explosive.

We know that China is posed to be the largest economy in the world in just a number of years. It is Canada's second-largest trading partner. Therefore, any opportunity we have to strengthen our economic relations with an important Asian economy such as South Korea will pay dividends for Canada down the road.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Mr. Speaker, I would like to assure the hon. member from the official opposition that the Liberals support not only free trade but also child care, so we are with him there. I think that this is a week when it is terrific that we are talking about a bill that has almost all-party support.

The hon. member from the official opposition has spoken very eloquently about the importance of this deal in terms of opening up Asia to Canada. I would like to hear his assessment of how the really big deal opening up Asia, the TPP, is going.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I would point out that while the New Democrats have announced a child care plan, it was based on the fact that the leader of the Liberal Party refused to commit to a Liberal government in 2015 bringing in a child care plan. The difference between the child care plans is that a New Democrat government will actually bring it in, whereas the Liberals will only talk about it.

In terms of the TPP, which is a whole different issue, it raises a lot of profoundly important considerations, many of which do not really apply to the South Korea agreement. It is a very important thing. This summer Canada hosted TPP negotiations in Ottawa. The TPP negotiations have been conducted with a completely unacceptable and unnecessary amount of secrecy.

Of course, the United States is the major anchor in the TPP negotiations, which is a regional pact with 12 different countries in it. There are many different concerns about that, including whether the United States will be pushing a very aggressive intellectual property regime that would damage Canadians' access to a free and open Internet. There are concerns about Australia and New Zealand and the United States wanting Canada to open up our supply-managed sectors, which the New Democrats are very strongly against. We believe that we should be keeping a strong supply-managed sector, as I believe the Conservatives agree with as well. For my hon. colleague from the Liberal Party, I am not quite sure what the Liberals feel about the supply-managed sector because some of their MPs and former MPs spend their time attacking the supply-managed sector. I am not quite clear on what their position is on that.

However, the TPP is a very important set of negotiations that I would like to see opened up so that Canadians and parliamentarians can see what is being negotiated and we can keep close tabs on the progress of that important pact.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, since everyone has such refreshing ideas, I wonder whether my colleague thinks it would have been refreshing a year or so ago to have received a little more information about the agreement with Korea. We would have been able to support it much sooner if we had received the information we had been asking for for some time.

We now find ourselves in an emergency situation that could end up costing our exporters millions of dollars. The reason we are in this position is that everything happened in secret and no information was available. Everything could have happened a lot faster.

What is my colleague's opinion on that?

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I would like to thank my hon. colleague, who does excellent work on the international trade committee and provides many thoughtful interventions there and in the House.

These negotiations commenced in 2004, so it has taken about a decade to conclude this agreement. On the one hand, it is regrettable that Canada was unable to close a trade agreement quicker because, as we heard, Canadian businesses lost what those businesspeople told us is about 30% of their market share in South Korea because the Americans and the Europeans got first market access two or three years before we did. On the other hand, I am a big believer that Canada should be getting good agreements not quick agreements.

I do believe that this agreement that has been placed before the House is a thoughtfully negotiated one. I believe overall it is quite strong and all parties are going to work together to ensure this agreement is in place to support Canadian businesses before the January 1 important deadline.

[The Acting Speaker, Conservative, Bruce Stanton]

Before we resume debate, it is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Rivière-des-Mille-Îles, Health; the hon. member for Charlesbourg—Haute-Saint-Charles, Rail Transportation; and the hon. member for Québec, The Environment.

Resuming debate, the hon. member for Toronto Centre.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Mr. Speaker, I would like to begin by reiterating that the Liberal Party supports free trade, and we are pleased to support this deal.

This is just the third day the House has been sitting since the terrible events of last Wednesday. It is very appropriate and fitting that on this day we are debating a measure that has the support of the three main parties in the House and that in the discussion we have heard about the tremendously powerful impact Canada's diverse population brings to the country.

We have heard a lot of members speaking eloquently about Korean Canadians and how the connections they have with Korea have been so important in building this deal and in building connections with that country. This is a week when all members of the House should be talking in the most forceful possible terms about Canada's strength in our diversity and Canada's strength in our pluralism. I am pleased that this Korean free trade deal has given us an opportunity to do that.

Coming to the deal itself, I am going to speak about our position on free trade and why we believe that free trade is so important, particularly for Canada. I am going to talk about why we support this specific deal with Korea. I am also going to talk about our concerns and about what we feel has gone wrong and could have been done better. Then I am going to speak about what our trade agenda going forward should be.

I would like to start by talking about free trade and why it is so important for Canada and is such a centrepiece of the Liberal economic program.

We are living in a time when the middle class is hollowed out, when the middle-class is getting hammered. That is something the Liberals have recognized and have been talking about. There is a lot of resonance among Canadians when we raise those issues. One of the ironies of an age like our own, when the middle class is suffering, is that national support for free trade can weaken and we can have the rise of protectionist sentiment. I am therefore absolutely delighted to represent a party that is strongly in favour of free trade.

I am also really delighted to be standing in the House and talking about a free trade deal that has such cross-party support. To have national unity around free trade will be an essential strength of Canada going forward. If we can maintain that, it will provide a competitive advantage for the Canadian economy.

Why is trade so important? Why is it central to Canada's economic success in the 21st century?

Canada is geographically vast. It goes from coast to coast to coast. The reality is that by GDP, Canada has only the 11th largest economy in the world. We are just not big enough to exist, grow, and prosper without being maximally open to the world economy.

Exports to date account for 30% of our GDP, and one in five jobs are linked to exports. The only way the Canadian middle class can grow is for the Canadian economy to become ever more global, for more Canadian businesses to be more competitive and doing more business in the world economy.

That is particularly true when it comes to the emerging markets of Asia, Africa, and Latin America. These are places where the middle class is rising up out of poverty, where there is growing consumer demand, and where there are attractive demographics. As a country, Canada has to be poised to sell into those markets. If we fail to do that, our own middle class will be squeezed and will falter. For Canada, there can really be no economic policy more important than a strong, aggressive, forward-moving, forward-looking trade policy. I am sad to report that the reality is that when it comes to trade in the world economy, if we look past the government's rhetoric, Canada is falling behind.

I would like to draw the House's attention to an important and thorough report produced this year by the Canadian Chamber of Commerce, a business group to which we pay a lot of attention.

This is a group that has a network of over 450 chambers of commerce and boards of trade, and it represents 200,000 business of all sizes and sectors in the economy, in all regions of the country. These people are important. We need to listen to what they are saying about what is happening to the Canadian economy.

I am afraid that when it comes to trade, the Canadian Chamber of Commerce is very worried. The title of its report says it all. It is called “Turning it Around: How to Restore Canada's Trade Success”. Here is what the Chamber of Commerce has to say about how we are doing. It agrees with the Liberals. It says:

International trade is one of the fastest and most effective ways for Canadian businesses to grow.... However, the increase in exports and outward investment has been slow in recent years, and diversification to emerging economies has been limited.

As we have just been discussing, emerging economies are the essential places for us to be going.

Looking deeper into the report, the chamber did a very important calculation in talking about what is actually happening to Canadian trade. I would like to quote it. It said:

Despite more firms looking abroad, Canada is lagging its peers according to several measures.

Yes. That is right. We are, as the report says, falling behind when it comes to our international trading position. The report goes on to say:

Over the past decade, the value of exports has increased at only a modest pace.

What is really interesting about this report is that the authors backed out increased commodity prices when they took a look at Canada's trading position. When we do that calculation, we see a picture of how we are doing on trade that is not at all pretty. Here is what the chamber said about backing out the price premiums we had been experiencing in energy, mineral, and agricultural commodities:

If these price increases are excluded, the volume of merchandise exports shipped in 2012 was actually five per cent lower than in 2000 despite a 57 per cent increase in trade worldwide.

What has actually been happening is that the world gets that trade is important. Globalization is not just a trendy word; it is the world's economic reality, and the reality is that Canada is falling behind. This trend is reflected in the trade numbers. In August, economists were predicting a $1.6-billion trade surplus. Instead, Canada recorded a $610-million trade deficit. These are worrying numbers, and there needs to be a lot more urgency on this file.

I would also point to an issue we heard addressed in question period today, which is falling commodity prices. Warren Buffett, the renowned investor, likes to say that when the tide goes out, we see who is swimming without their trunks on. I am worried that high commodity prices for the Canadian economy have been like a high tide that has obscured a lot of problems, nowhere more so than in trade. As those commodity prices fall, we need to be really worried about what they are going to show is happening in trade.

Turning now to Korea, we agree with our colleagues from the government and the official opposition that this is an important deal, and we share their urgency about getting this finalized by or before January 1. It is important to Canadian businesses, it is important to Canadian exporters, it is important to the people who work in those industries, and it is therefore very important to the Liberal Party.

Korea is Canada's seventh-largest trade partner. In 2013, we did $10.8 billion of trade between us.

Korea is an attractive partner to us, because it is a democracy. This is a country that is a real technology leader, including, as we have heard, in green energy. It is a country that is very culturally innovative. I think we can learn a lot of lessons from Korea about being a global cultural leader, even if we are not one of the big powers. It is an economy that is very attractive to Canada's agri-food industry, to our aerospace industry, and to our spirits industry, so we are very much in favour of this deal.

Having said that, I would be remiss in my responsibilities if I did not point out some of the problems we have with it. The biggest concern we have with this Korea free trade deal is that it is late.

The United States economy, with which we are most closely connected, ratified its trade agreement with Korea in 2011, and the agreement went into effect in 2012. Korea's trade deal with the EU has been provisionally in force since July 2011.

This delay is not just about some kind of theoretical competition over whose date is first. The delay in getting the Korea deal done has had direct and meaningful impacts on Canadian exporters. The global economy is extremely competitive. Businesses know it. Canadian businesses are suffering, and they have been let down, when it comes to Korea trade, by the government. We have lost 30% market share in Korea, more than $1 billion, because we have been slower to come to a deal.

We heard the parliamentary secretary to the minister waxing lyrical about the Korean affection for Canadian lobster, and Koreans should indeed be enthusiastic about eating Canadian lobster. I know that everyone in the House is. However, the government should be apologizing to Canada's lobster industry for putting it at a disadvantage.

I want to read a quote, from The Globe and Mail, from Stewart Lamont, managing director of Nova Scotia's Tangier Lobster Co. Ltd. He said, “The Americans are 2-1/2 years ahead of us, but better late than never”.

That is really the story of this agreement. We are supporting the deal. We are glad it is happening, but this is a story not of triumph but of better late than never.

I would like to point out that our negotiations with Korea began in 2005. The Americans started talking to the Koreans in 2006 and to the EU in 2007. Despite starting negotiations sooner, we have concluded the deal later, and that is something that has had a measurable impact on the bottom line of Canadian exporters.

We need to get this deal done by January 1, but everyone in the House should be aware that the slowness of getting a deal done means that Canadian companies have to run extra fast. They have to claw back that lost export position in the Korean market, and that is going to be very hard work for them.

What we hear when it comes to the reasons for Canada falling behind and this deal having been done behind the U.S. and behind the EU, despite the fact that negotiations began sooner, is that it had a lot to do with the top-down, hyper-controlled approach to issues we see from the government when it comes to the domestic agenda. The Korean deal is more evidence that this approach, which is rejected by so many Canadians now at home, also slows down our relationship with our international partners.

There is support from us. There is support from the official opposition for this deal. I am very pleased that there is that support. It is urgent that we lose no more time getting this deal finalized by or before January 1.

We would be derelict in our duty if we were not aware that this deal has come late. It is better late than never, but it would have been much better had it not been late to begin with.

This deal is particularly significant, because it is our first deal in Asia. It is really important, going forward, that we not allow the mistake of falling behind to happen in our future deals. I am going to talk in a moment about those other deals and the approach Canada needs to take.

However, before doing that, I would like to also urge the government to release a study the department did on the economic impact of the Canada-Korea free trade deal. This study has been requested by many stakeholders, and their access to information requests for this study were very keen, particularly given the fact that the deal is due, we hope, to be finally confirmed by the end of the year.

We call on the government to release this study of its economic impact. Now is the time for us to have that information and to talk about it. It should be made public. Given that the agreement is being supported by both the Liberals and the official opposition, I can really see no reason why the government is not coming out publicly with that more detailed information.

When it comes to the trade agenda going forward, the really big issue on the agenda and what we really need to focus on is TPP. This is an agreement which will touch on 40% of the world economy. In current economic conditions, when a lot of economists are concerned that we are suffering from secular stagnation, that the whole world economy has moved into a new low-growth paradigm, TPP could not be more essential. This could be one of the few levers that we have to get the global economy going. It is essential for Canada and it is essential for the world.

These comprehensive TPP talks started in 2008. Canada, I am sad to say, did not join until 2012. I am afraid we see the pattern with Korea being repeated here. We are slow to come to the table. We really have to focus. We are seeing something wonderful, a tremendous competitive advantage in our country, which is real support across the political spectrum for the Korea deal, for trade with Asia, for trade with the world. It is absolutely incumbent on the government to use that strong political support for free trade, to be an active and energetic partner in the TPP talks to get them going.

Negotiations actually are going on right now. They happened over the weekend in Australia on TPP. I urge the government to be a more active participant in those talks. I am sad to say that when we speak to our trading partners, our international partners, they say that something which we have seen in Canada's relationship in multilateral institutions around the world is, I am afraid, being repeated in TPP.

Canada used to have a reputation as one of the world's most effective multilateralists, as a country that was good at working in a group, at working with others, at getting deals done, at leading deals. However, when it comes to TPP, I am afraid that the reports we are hearing is that Canada is missing in action, Canada is not playing a leadership role and in fact that Canada is frustrating our trading partners.

That really cannot continue. This is an essential deal and we need Canada to be a leading voice. We cannot have a repeat of what we have seen with Korea, which is a policy that is widely supported across the House by so many people, yet actual delivery for the Canadian economy, for Canadian business has been delayed at a cost.

Again, I want to return to this number because it is not just about rhetoric. It has been at a cost of more than $1 billion. Let us think of how valuable those billion dollars could be if they were in the Canadian economy right now.

TPP is the big one. Even as we support the Korea deal and opening up of the Asian markets in this way, I want us to focus on that. I want us to be absolutely energetic, be leaders in those negotiations.

More general, it is absolutely essential that Canada be energetic, that Canada be in the lead when it comes to opening up those emerging markets about which the chamber of commerce spoke. I would like to pay particular attention to Africa.

Finally, yesterday was parliamentary elections in the Ukraine. The results look very promising for Ukrainian democracy and for Ukraine's move toward a pro-reform, pro-European attitude. We heard recently Ukrainian President Petro Poroshenko address the House and call for a free trade deal. Let us not be behind on that. Europe has already opened up its markets to Ukrainian goods. Let us do that, too.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I have a couple of questions that I think Canadians would want me to put to the hon. member.

She is the international trade critic for the Liberal Party, but she does not sit on the international trade committee and does not attend international trade committee meetings. When this agreement was put before committee to be studied and we heard from witnesses, she was not present to listen to any of the testimony that was put before the committee. The Liberal Party advanced and proposed no amendments to this agreement.

Could the member explain to Canadians why, as Liberal trade critic, she does not think it is important enough to come to the international trade committee and actually study the legislation, listen to the witnesses who come before our committee and give us the benefit of their perspective, and to help formulate policy in the House?

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Mr. Speaker, on a day when we should be supporting and cheering the cross-party support for this free trade agreement, that was the kind of rather mean-spirited question I would expect more to hear from the government side of the House.

I will say what I would have said had the question been from the government side of the House, which is that it is neither the responsibility of the government nor of the official opposition to decide how the Liberal Party deploys the resources of its members. For now, we are a small party, but we will not be for long. There are a lot of duties for all of us to cover. It has been our collective decision to have one of my very talented colleagues serve on the committee. We work very closely together.

If the hon. member from the official opposition would like to speak about positions that are difficult to understand, perhaps he would like to let this House know why the NDP, which has been so opposed to free trade deals historically, has decided to turn tail when it comes to Korea. That is the right decision, but I wish it had come sooner.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I want to commend my colleague for pointing out that this is so important for Canada's middle class, the opportunity, through this free trade agreement, to grow our exports, our businesses and even to create jobs. We in the Liberal Party have always supported that part of it. We are a pro free trade group.

However, there is an interesting point here to look at. Unfortunately the member had to point out the fact that we started this nine years ago under a Liberal government, and that it actually took nine years, and hopefully we will pass it very soon, for this free trade agreement to occur, our first free trade agreement in Asia.

When other countries like the United States and others start after us, why do they manage to come up with a free trade deal sooner than we do? What is it? Is it that they hustle more than we do? Is it that they want it more than we do? Why has it taken us nine years?

I share the member's concern that when we negotiate for the trans-Pacific partnership, we will behind the eight ball again, unless we change the way we approach free trade deals.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Mr. Speaker, my colleague has indeed focused on what is our chief criticism of this deal, which is that it has come late at a great cost to Canadian businesses, Canadian exporters and Canadian jobs. As to what the reasons are, I can only speculate, but I would suggest two reasons.

One is something that we see all too often with the government, which is a mismatch between rhetoric and action. There is a lot of rhetoric on trade, but we have not actually seen that when it comes to this Korean deal and we certainly are not seeing it when it comes to TPP.

The second reason, which is something that we have been learning when we talk to stakeholders and particularly when we talk to our other partners in multilateral institutions, is that the top-down rigidly authoritarian approach to government, which we see first hand domestically, carries through when it comes to how Canada behaves in its international dealings, and that slows things down.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, talking about rhetoric, I find it so interesting and amusing to listen to the Liberal member talk about the Liberals' trade policies and their history on trade.

In fact, I agree with my colleague from the NDP that we had a lot of witnesses who provided a lot of great information. When we talk about rhetoric, she could never really quote anyone individually because she was not there to listen to them.

If we look at the Liberal trade policy and the trade deals, how many trade deals did the Liberal Party, when it was in government, actually sign? How many did the Liberals actually close and seal?

The reality is that when we look back to the history of trade in Canada, it has been the Conservative Party that has done the majority of the deals and it is this Conservative Party that is getting the job done today.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Mr. Speaker, the member opposite has been in the House longer than I, but I would like to point out to him that when it comes to parliamentary procedure, it is not our tradition to directly address other members.

I have heard this before and was I expecting to hear it again from the government benches. For the record, I really want to protest strenuously. A majority government has a lot of prerogatives in a Westminster system like our own, but it cannot decide what members of the Liberal Party do and which committees they serve on. It is absolutely unfair and slanderous quite frankly for the government to have suggested, as it has, that somehow I am derelict in my duty by not serving on trade committee. I want to say that for the record.

We are talking specifically about Korea. Canada is behind the U.S. and the EU, both of which began negotiating after we did, and this has cost Canadians more than $1 billion. We have lost 30% of our position. These facts speak for themselves.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, I want to go on the record as saying that maybe we have not signed any free trade agreements and we are not for free trade, but we surely are in favour of fair trade. We have always believed in fair trade.

When the government signs trade agreements, it needs to ensure that the working people of our country and the working people in the countries with which it signs trade agreements are protected. The government needs to ensure that the working people in those countries have the same advantages as the working people in our country. Neither the Liberal government nor the Conservative government have signed any agreements which protect the men and women who build these countries. That is one of the reasons why we do not support free trade.

Do the Liberals still believe that the government should sign agreements without having an article in them which would protect the working people in those countries?

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Mr. Speaker, the Liberal Party strongly believes in protecting the working people of Canada. That is why we are such strong supporters of free trade. In the 21st century, Canada's economy is only the 11th in the world when it comes to GDP and cannot survive or grow without free trade.

The hon. member's question gives me an opportunity to return to the non-partisan spirit with which I began my remarks and which is really important today. We have undergone a big trauma recently and it is a wonderful thing that we have cross-party support for free trade.

I hope the hon. member will agree with me that while all of us advocate for different policies, I am sure everyone in the House supports the working people of Canada.

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of Labour and for Western Economic Diversification]

Mr. Speaker, I am very pleased to join today in strong support of the Canada-Korea economic growth and prosperity act.

As we have said regularly, our Conservative government is committed to protecting and strengthening the long-term financial security of hard-working Canadians. We understand that Canada's prosperity requires expansion beyond our borders into new markets for economic opportunities that serve to grow Canada's exports and investments. That is why we will continue to deliver pro-export leadership.

Since coming to office in 2006, we have reached free trade agreements with 38 countries. These countries make up more than half of the global economy and represent nearly one-quarter of the world's countries. When they were in power, the Liberals took Canada virtually out of the game of trade negotiations, putting Canadian workers and businesses at severe risk of failing and falling behind in this era of global markets. In fact, the last time the Liberals tried to talk seriously about trade, they campaigned to rip up the North American free trade agreement.

Before I continue any further, I will mention that I will be splitting my time with the member for Huron—Bruce.

Our government cares deeply about trade and our country's economic growth. Last fall the Prime Minister announced a historic agreement in principle with the 28-nation European Union that will give Canadian businesses preferred access to half a billion affluent customers.

I always go back to what my cattlemen said. They did not talk about the affluent customers but about the hungry customers, because they saw a tremendous opportunity for the cattle export business. Right in my own riding, people are seeing the enormous opportunities that this agreement would provide.

Our Conservative government recognizes that protectionist restrictions stifle our exporters and undermine Canada's competitiveness, which in turn adversely impacts Canadian families. That brings me to the issue at hand today, which is the Canada-Korea free trade agreement.

Implementing this free trade agreement is critical to maintaining Canada's competitive position in the global marketplace. It would restore a level playing field for Canadian companies in the South Korean market. Right now our competitors, including the U.S. and the EU, are already enjoying preferential access because of their respective FTAs with South Korea.

For Canada, the Canada-Korea free trade deal is a landmark agreement. It represents our first bilateral trade agreement in the Asia-Pacific region.

I heard the critic for the NDP talk earlier in terms of central Canada and eastern Canada, which tend to look to South America and Europe, but to our western provinces of British Columbia, Alberta, and Saskatchewan, the whole Asian-Pacific gateway is incredibly important. It really is a key to increasing our global competitiveness.

Of course, trade and investment represent the twin engines of growth for the global economy, and again I have to reflect on the anti-trade ideology of the NDP. Although the NDP may support the bill a little bit, it is a fact that it did try to sabotage this bill at the trade committee. Rather than thinking about what is best for all Canadians, the NDP tabled amendments to remove the investor protection provisions, cornerstones of a modern trade and investment agreement, in order to please a small group of its supporters and perhaps some supporters of the Green Party.

On this side of the House, we know that there is no better job creator or economic growth generator than freer and more open trade. Canadians are proud of our long history as a trading nation, and for good reason: one out of every five Canadian jobs is dependent on exports. In fact, trade drives 64% of all of Canada's economic activity every year. That is why we have embarked on a very ambitious pro-trade plan. I believe it is the most ambitious in Canadian history.

A diverse range of sectors would have increased trade opportunities because of this free trade agreement, including industrial goods, agri-food products, fish and seafood, and forestry products. Earlier I mentioned beef; another area that is relevant to my riding in British Columbia, Kamloops—Thompson—Cariboo is forestry. It is incredibly important to open that up, as it has gone through a little bit of a difficult time with the economic recession. There are huge opportunities.

Canada's world-class service sectors would also benefit from improved market access, including professional services and research and development services.

The Canada-Korea free trade agreement would create thousands of jobs for Canadians by increasing our exports to South Korea by 32% and boosting our economy by $1.7 billion. Over 88% of Canada's exports would be duty free upon entry into force, and over 99% would be once the deal was fully implemented. The huge amount of Canadian exports becoming duty free upon the coming into force of the agreement is important, given the urgency of restoring our competitive position in the South Korean market.

It is important to note that when embarking on trade deals with other countries, we do so bearing our responsibilities in mind. I am happy to say that while we are working hard to advance our trade agenda, our government is also ensuring that labour rights and obligations are respected. That is why the free trade agreement with Korea has a labour chapter that includes robust labour provisions.

Canada and Korea have committed to ensuring that their laws embody and provide protection for internationally recognized labour principles and rights, notably those included in the International Labour Organization's 1998 Declaration on Fundamental Principles and Rights at Work. For those who may not be aware, the declaration covers the right to the freedom of association, the right to collective bargaining, the abolition of child labour, the elimination of forced or compulsory labour, and the elimination of discrimination in the workplace. Through these provisions, we demonstrate our shared commitment to improving labour standards and protecting the rights of workers.

Both countries have also committed to ensuring acceptable protections concerning occupational health and safety, including compensation in cases of injuries or illness; employment standards, including minimum wage and overtime pay; and non-discrimination in respect of working conditions for migrant workers.

The labour provisions in this agreement stand out from the pack. For the first time, all obligations are now subject to a dispute settlement mechanism, which may apply financial penalties in the case of non-compliance. The labour provisions are comprehensive and enforceable. That speaks to the level of commitment from both countries to maintain high labour standards in this trading relationship.

Our relationship with South Korea is not new. Canada has long enjoyed positive relations with South Korea. In 2013, we marked our 50th anniversary of diplomatic relations. While the agreement would provide a modern and stable foundation to grow our bilateral relationship, it builds on a long history of political and economic co-operation. During the Korean War between 1950 and 1953, Canada contributed the third-largest contingent of troops to the United Nations Command. There were some 26,791 Canadian soldiers who served in Korea, of which 516 lost their lives. After the Korean War armistice, 7,000 Canadian soldiers served as peacekeepers between 1953 and 1957.

Significant trade and investment ties have further solidified our relationship. South Korea represents an important market for Canadian commodities and has proven to be a valued source of investment. Without question, the agreement will level the playing field for Canadian companies and enhance their ability to tap into global value chains, boosting their global competitiveness, profitability, and long-term sustainability.

The benefits of the Canada-Korea free trade agreement for our country are far too significant to overlook. Canadian stakeholders from across the country have repeatedly called for the agreement to enter into force immediately to secure Canada's competitive position in the South Korean market. Our government is equally keen to tap into the Asian market and create more jobs for hard-working Canadians. For these reasons, I call for the urgent passage of Bill C-41 and the rapid implementation of the Canada-Korea free trade agreement.