House of Commons Hansard #133 of the 41st Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was agreements.
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Mr. Speaker, every free trade agreement with another country, including the one with Korea, helps develop the economies of both partner countries.
On this side of the House, we are very proud of what we have accomplished through our free trade agreements with countries around the world.
Kennedy Stewart NDP Burnaby—Douglas, BC
Mr. Speaker, I am pleased to rise today to speak to Bill C-41, an act to implement the free trade agreement between Canada and the Republic of Korea. There are a number of things I would like to highlight in my few minutes here.
I would like to say why I support the bill.
First of all, I follow the party criteria that we should only be engaging in trade negotiations and signing deals with partners that respect democracy and human rights, have adequate environmental and labour standards, and share values similar to ours.
Second, we should only be doing deals that provide an economic advantage to us.
Third, we should only sign deals if the terms are satisfactory.
Our trade critic, the very hard-working member for Vancouver Kingsway, has put his mind to this bill, as have all of us on this side of the House, and we think this agreement is worth supporting. I am proud to say that. We will keep an eye on this measure as it moves forward.
When I reviewed the deal and looked at the history of the two countries, I was struck first by how different they are and then, perhaps thinking about the lessons that I have learned from having a very large Korean community in Burnaby, by what we can hope to gain from this deal beyond merely trade. I am hoping that we can take some inspiration from how the Koreans have built their economy.
We have a tale of two countries that have come together to do a trade agreement. In the 20th century, Korea was at war from 1950 to 1953 and had 375,000 civilian deaths. That is a massive loss of life. In talking to Koreans, we hear that the country was more or less bombed flat. Koreans had a very difficult rebuilding process, both economically and politically. I have talked to the scientific adviser to the President of Korea, who said that with essentially no energy resources, they had to be quite creative when it came to rebuilding their economy.
South Korea became a full democracy in the 1980s, when the constitution was changed to allow direct election of the president. South Korea then held its first free parliamentary elections in that decade, the same decade that it hosted the Olympics.
South Korea also has a very troubled relationship with North Korea, as everybody in the world does. It is a very difficult neighbour to have. In 1980, South Korea's GDP per capita was just over $1,700. Twentieth century Korea was very different from 20th century Canada.
Canada participated in the Korean War. We sent 26,000 troops and we had 512 casualties, which is a high number, but it was well worth the effort. As we move toward Remembrance Day, we want to remember all those who fought in the Korean conflict.
Where Korea had a massive loss of civilian life, there was no real domestic destruction here in Canada in that conflict. Where South Korea moved to becoming a full democracy in the 1980s, we are one of the oldest democracies in the world. As for problems with our neighbours, we have none. The U.S.-Canadian relationship is one of the strongest in the world. In 1980, the South Korean GDP per capita was $1,700, while in Canada it was $11,000, ten times higher than in Korea. It really paints two different pictures of 20th century Canada and South Korea: one is a picture of a country getting on its feet after a tremendous struggle and the other is a picture of a very strong and enduring democracy.
It is also worth thinking about where our countries are now, in the 21st century. In Canada, our GDP per capita is $52,000. That is five times higher than in 1980, so we have had significant economic growth. Our population is 35 million, and we are 15th in the world in terms of GDP, at $1.5 trillion.
However, what is remarkable is what has happened in South Korea. The GDP per capita in 2014 is almost $26,000, which is 25 times what it was in the 1980s. That is the fastest-growing economy in the world over that period. The current population is 50 million. South Korea has passed us in terms of GDP, with a $1.7 trillion economy. It is 13th in the world; we are 15th in the world.
The question is, how did South Korea do this? How did it pull off what we might consider an economic miracle?
Korea invested in science. It invested in research and development. It is worth looking at how this investment has rolled out and compare it with what we are doing here in Canada with the hope that we will take lessons from this.
In 1991, Korea, both the public and private sector considered, spent 1.8% of its total GDP on research and development. That is very close to what Canada spent on research and development in 1991, which was 1.55% of total GDP. That is about a 0.25 percentage point gap in 1991.
However, in 2006, when we elected the Conservatives who unfortunately were not investing in science, the Koreans certainly did. In 2006, where Canada was spending 1.96% of our GDP on research and development, the Koreans were investing over 3%, so it is a big jump. The gap between the two countries became very sizable at a 1.05 percentage point gap. When we think about that in GDP terms, that is a massive amount of money.
The Korean government committed to investing in research and development and that is what they have done. Look where they are now. In 2012, Korea is the top investor in research and development, and 4.36% of their GDP goes into research and development. We have fallen. We have actually lost significant ground, not just to Korea but to many other countries in the world. Canada only invests 1.69% of our GDP. That is a 2.67 percentage point gap. That is a huge gap.
The Koreans are almost tripling our investment in research and development, which is why we have very different economies. What is scary is that the Koreans have just recently committed to investing 5% of their entire economy back into research and development. Again, that is public and private sector spending. That is the way the Koreans pulled themselves out of the horrors of war and it is the way they are going to continue to develop economically.
We just have to look at the companies that Korea has built from scratch. Look at Samsung Electronics. It is a $165 billion company when we look at the market capitalization of outstanding shares. The Hyundai Motor Company is $50 billion; POSCO, the steel company, is $33 billion; Kia Motors, $29 billion; Hyundai Mobis, which is an auto parts business, $26 billion; LG Chemical, $20 billion. The list goes on and on.
If we compare that with what is going on in Canada, the Royal Bank of Canada is the biggest company in Canada by market cap at $88 billion, which is half the size of Samsung. Toronto Dominion Bank, Bank of Nova Scotia, Bank of Montreal, all within are our top ten companies, are financial services, not necessarily innovators.
That is really what we see when we look at what companies dominate the Korean economy: Samsung, Hyundai, Kia, LG, Hynix semiconductor. These are all big companies that have been really driven through a sustained and very focused effort on understanding economic drivers and making sure that the proper monies are put in to encourage research and development. In Canada, we have been relying on finances and natural resources. Besides the banks, our big companies are Suncor, Enbridge and TransCanada.
I hope we can learn from the Koreans. Innovation never goes away, unlike natural resources, which do disappear. If we look at our fish stocks, our trees, even oil and gas, these things all go away. What the Koreans have learned is that innovation is essential to the future.
I am pleased that we have decided to sign this trade deal in the hope that we will take lessons from the Koreans and build our knowledge economy here.
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, it is really important to talk about free trade agreements, and it is great to see that the New Democrats are now supporting free trade.
One of the important issues that needs to be recognized is that it is not only about trade agreements, but overall trade. Over the last number of years we have witnessed a substantial decrease in trade in terms of having a trade surplus prior to the Conservatives coming into government and ultimately turning that into a major trade deficit. That means literally hundreds, thousands of jobs have been lost because the government has not done well on trade, on the bigger picture.
Could the member provide some comment? As important as it is that Canada look for and sign trade agreements, it is equally important, if not even more important, that we watch that bottom line. This is where the government has been negligent. It has failed to meet the potential of our Canadian exporters by ensuring that countries around the world are participating and consuming our products.
That is, in essence, the real reason why we now have a trade deficit as opposed to a surplus, which equates to jobs.
Kennedy Stewart NDP Burnaby—Douglas, BC
Mr. Speaker, in terms of how badly the Conservatives are managing the economy, it is hard to know where to start. We can work with trade deficits, and that is kind of where we are in this debate.
It is clear that the Conservatives have put all their eggs in one basket. They just want to triple the output of the oil sands, ram pipelines through British Columbia, ram pipelines through the rest of Canada and hope that provides the jobs they think it will. However, with predictions now of $70 a barrel oil, that may be a big fault. It would be a mistake not to diversify, not to invest in the knowledge economy, not to look for other means of exporting.
For example, we do not just have to export oil. We could export education or culture. There are all kinds of different industries that could be grown, but the government has cut all of those industries. It has put all its eggs in one basket and I think it is a huge mistake.
Denis Blanchette NDP Louis-Hébert, QC
Mr. Speaker, I thank my colleague for his excellent speech. He identified many important aspects of free trade agreements, particularly one with Korea, a society that has decided to focus on high tech.
Unfortunately, there is a downside. I am not sure we are in the same league as Korea when it comes to that. I would like my colleague to comment further on that.
Are we in a position to act fast so that we too can trade value-adds rather than just raw resources for high tech? What are his thoughts on that?
Kennedy Stewart NDP Burnaby—Douglas, BC
Mr. Speaker, it is a great question. We are talking about an economic vision here. The government has had almost four years to tell us what its vision is, in a majority, and it is simply putting all its eggs in one basket.
We need to learn from other countries such as Korea that have national plans. Every country in the world would have a national energy plan. We do not have one here. All countries have housing plans and economic development plans. The government seems to be unable to put these together and it is causing all kinds of chaos in different sectors of the economy.
What we can learn from other countries is to get our house in order, have a clear vision and present it to the public, and we will have battling visions next year.
Bradley Trost Conservative Saskatoon—Humboldt, SK
Mr. Speaker, I always enjoy getting involved in debates concerning trade and concerning the budget, because one of the things about these debates is that it enables us as parliamentarians to speak to our constituents about broader principles. I do not currently sit on the international trade committee. I have in the past and really enjoyed it. I do not quite have the detailed knowledge of this particular agreement that the members of the committee have, but trade is an important subject for Canada.
We can talk about the broader economic impacts, the principles, the understandings, because our debate in this place is not just to convince each other of the merits of this particular legislation but also to explain and educate Canadians on why the principles of free trade work and why we support this in a broader sense. Interestingly enough, it appears all three major parties will be backing the bill. One of my degrees being in economics, I very much enjoy talking about these broad principles in trade.
One of the things people instinctively understand in their individual lives is that trade is good. When I go to a grocery store, I trade. I may trade for a bag of chips. I may trade for a carton of milk. However, I always trade something. At every store I shop at, whether it is where I come from in Saskatoon or in Ottawa, I end up with a trade deficit with them, so to some of the hon. members who are implying that all trade deficits are bad, they need to think about that. For most people, when they buy something, a trade deficit is actually a good thing.
My salary is the one place where I have the equivalent of a trade surplus. My wife of course has the same thing. We instinctively understand that trade between individuals and each other, and individuals and businesses is good, but sometimes we do not always understand that the exact same principle goes from country to country, from nation to nation. Let us face it, what is a country? It is a collection of peoples that for some reason have been drawn together. Perhaps they have a common history, a civic identity, such as we have here in Canada. Perhaps they have a common ethnic identity, as do some countries in the world. However, whatever it is, a group of individuals have gotten together. It is not just trade among those individuals, but individuals across boundaries from one nation to another. Therefore, the principles fundamentally apply. It is just that with the complexity, the distance and everything, we begin to argue different principles, but it is really the same.
Free trade from an economic perspective is always in everyone's economic interest. There may be political interests. There may be other reasons why one may not want to trade with a particular country. We have trade sanctions against various regimes not because we think that benefits us economically. In fact we even acknowledge it hurts us economically. We do it because we want to make a broader political point and we are prepared to take whatever pain to advance a broader cause.
That is why it gives me pleasure today to talk about the agreement we have with the Republic of Korea, commonly known as South Korea.
Having read a little, not too much, of Asian history, I find it fascinating how the people of the Republic of Korea, South Korea, have been able to advance and build their country over the last decades in particular, starting after World War II where it had essentially been run as a Japanese colony and then of course came the absolutely disastrous, brutal Korean War that affects them to this day. They were at that point, according to one reading I had, the poorest or next-to-poorest nation in the entire world. Today, by some estimates they are the 30th wealthiest country in the world and the 13th largest economy. It is a country approaching 50 million people.
For those of you who have not had the pleasure of travelling there, go there. It is a vibrant, wonderful country. I have been there a couple of times. My wife Gerelt worked there in the Korean parliament, prior to her immigration to Canada. She just loves it and adores the people there and has actually come to really love the food. I am a Saskatchewan farm boy. It was a little different, but it is there.
Korea has become an absolutely dynamic leader in the world economy. That is one reason why we as Canadians need to get involved and trade with it more. As has been noted, in 2011 we had $5.1 billion per year in exports to Korea and our growth and exports over the previous five years had grown by a compounded rate of about 9.2% per year. Now, looking through our numbers here we are down to $3.7 billion in the final year that we have statistics for. That is a drop in trade.
The economy is growing, et cetera. Why did we have a drop in trade? One of the particular and major reasons we had a drop in trade with South Korea, which we all know, is that some of our competitors got involved with major trade agreements, in particular the United States of America. The Europeans are also finishing their trade agreement with South Korea.
That brings me to one of the absolutely major reasons we need to get involved in this trade agreement. It would protect markets we have built up and are now losing because of competitors that have come after us.
For the various reasons that have been discussed, we were not able to quite get the agreement as soon as we wanted. We do not have quite the same leverage. We do not have the geopolitical strength in that area the United States does. However, we need to catch up. We need to get involved with South Korea and follow up on that trade agreement.
This trade agreement is also important for diversification. One of the ongoing trade issues we have with the United States is country of origin labelling. Through the back door, the United States is stopping the export of cattle and various other products into its market.
It is a great benefit for us to be involved with the United States of America. However, dealing with and making trade agreements, as we are with Europe, and as we are now debating, with Korea helps us to diversify our markets for all of our goods. When there is a country that acts with a backward policy, as the United States government has done with its country of origin labelling, we will have other options, other places to go to sell our products, in this case, agriculture. That is why it is absolutely important and vital that we continue to engage in treaties, not just this one but all others.
I would be remiss if I did not bring up this point, because I often see in the House that we debate and gladly and quite accurately talk about all the trade benefits that trade agreements have for our exporters. However, let us be blunt. There are great benefits for our consumers. If I may, I will throw in a quote, again, from one of my favourite economists, Mr. Milton Friedman. He said:
The great danger to the consumer is monopoly—whether private or governmental. His most effective protection is free competition at home and free trade throughout the world.
This is a benefit that is often overlooked. When we reduce tariffs on South Korean imports to Canada, that allows our consumers to buy the exact same goods at a lower price and have more money to spend. Our importers that use Korean products then have lower costs for their imports. It makes them more competitive. One of the things we need to always remember and celebrate, actually, is the benefit to consumers from this agreement.
Finally, coming from Saskatchewan, Canada's agriculture heartland, I have to note some of the benefits for the agriculture industry.
In Saskatchewan, it does not matter where one is, Saskatoon or Regina, big towns or small, everyone benefits from a growing agriculture economy. My riding in particular, with one-third being a rural area and with the College of Agriculture at the University of Saskatchewan, benefits fairly directly.
Let me, for the record, put in a few of the cuts to tariffs South Korea would make that would help us sell more and challenge our rivals in the United States and Australia
The current rate for rye is 108.7%. That would be reduced.
Flaxseed may be only 3%. The current rate for pulses is up to 607.5%. Coming from a riding where pulses are very important and have helped us diversify from wheat, that is very important.
Animal feed, pork, flaxseed, golden roasted flaxseed, mustard seed, and of course, wheat are all products Saskatchewan grows and exports. This agreement would add to the $149.5 million, from 2010 to 2012, in agriculture products we exported to South Korea.
I look forward to questions on this important trade deal for all Canadians.
Rosane Doré Lefebvre NDP Alfred-Pellan, QC
Mr. Speaker, I thank my colleague across the aisle for his speech.
I gave a bit of a summary of what happened with Bill C-41, An Act to implement the Free Trade Agreement between Canada and the Republic of Korea. In the latest reports I have read, I noted that the committee has had only one meeting on this free trade agreement.
Although the NDP supports this bill and the government on this free trade agreement, we still proposed six amendments. These relatively simple amendments were meant to improve the free trade agreement and, more importantly, to protect Canadian jobs, especially in the manufacturing and automotive sectors. Unfortunately, those six amendments were rejected.
Did my colleague across the way have a chance to study those amendments? Did he not think they were good?
Bradley Trost Conservative Saskatoon—Humboldt, SK
Mr. Speaker, as I noted in my speech, I no longer sit on the trade committee. I did before, prior to the last election.
One of the things we often talk about when it comes to trade deals, which the hon. member talked about, is protection. Protections for industry in trade deals are often damaging to the consumer. What we protect with one hand, we take away from other Canadians with the other. I am not sure if that is what the amendments the hon. member is referring to would have done, but it is something we should be cautious about.
We often talk about protecting industries, but what we often mean is that we are putting hidden taxes on consumers.
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, I would like to pick up on the member's opening comments. When he was talking about a trade balance, he implied that there are certain situations where a deficit is a good thing.
Thinking of the trade deficit that was created, in fairness by the Conservative government, I am interested in how the trade deficit was a good thing for the Canadian economy.
Bradley Trost Conservative Saskatoon—Humboldt, SK
Mr. Speaker, the hon. member makes an interesting point. While most people instinctively understand that running fiscal deficits is a bad thing over the long term, notwithstanding the often Keynesian approaches all parties take, ours less than any of the others, deficits, when it comes to trade policy, are not necessarily a bad thing. We have to understand that the numbers that are often given are not totally encompassing. Canada has long run a trade surplus with the United States, but it does not include things like Canadian tourist trips to Florida, so these numbers are often incomplete.
The only way we can run trade surpluses with one part of the world is if we end up with trade deficits with the others. Of course, there are ways around it if we borrow, do not pay our bills, and so on. However, let us assume that all bills are paid. If we run trade deficits in some parts of the world, we bring in cheaper or more goods. These goods can then be used to manufacture, produce things, and ultimately, provide goods. Again, this is assuming that everyone pays and that there is no borrowing or theft.
Just as with human beings, countries have to pay their bills. One man's surplus is another man's deficit. In the end, the books should balance themselves.
Bruce Hyer Green Thunder Bay—Superior North, ON
Mr. Speaker, I have been listening to the member say that all free trade is good and that balanced trade deficits are not bad. Now I am hearing the other two main parties in the House drifting over. I guess that it is out of fear that if they do not appear to be pro-business and pro-development, they will lose votes in the next election.
I would like the member to explain how a balance-in-trade deficit, when we get Hyundai cars and kill our auto industry and auto worker jobs here in Canada, is a good thing for Canada. How does that promote the growth of innovation and trade in our country?
Bradley Trost Conservative Saskatoon—Humboldt, SK
Mr. Speaker, as I pointed out, the hon. member needs to understand that if we run a deficit in one place, we will end up running a surplus in the other.
I run a deficit with every car dealership I have ever bought a car from. I run a surplus with the federal government, because I am employed by the federal government. That is where the balance ultimately comes out.
We have winners and we have losers. That is true, but in the end, everyone is a winner with free trade, in an economic sense. As I qualified before, we do not always do things for the best of the economy, as there are other priorities.
In an economic sense, everyone wins, because it is ultimately about the specialization of labour. It is about the most efficient way we can exchange goods and services and produce them for the benefit of all.
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, I plan to address the benefits versus the lack of benefits if we have a trade deficit.
First, I would like to provide some context. When we talk about trade with Korea, what are the types of items we are talking about? When we think of Korea and the exports it has, we are looking at motor vehicles; trailers; bicycles; motorcycles; electrical machinery and equipment; boilers; mechanical appliances; iron and steel articles; plastic and plastic articles; rubber and rubber articles; optical, medical, and scientific technical instrumentation; mineral fuels; oils; and copper and copper articles. These are the top Korean exports to Canada.
To my mind, and to the minds of many Canadians, a particular concern is the automobile industry. There is a great deal of interest in what will happen to our automobile industry. Obviously, the automobile industry as a whole in Canada provides tens of thousands of good-quality jobs for Canadians.
When we think of what Canada exports to Korea, top on the list are minerals, fuels, oils, and so forth. Next to that, we are looking at ores, slag, and ash; wood pulp; boilers and mechanical appliances; wood and wood articles; charcoal; aluminum and aluminum articles; electrical machinery and equipment; optical, medical, and scientific technical instrumentation; cereals; and, a very important one for me and something I have had an opportunity to talk a great deal about in the House, meat, particularly Manitoba's wonderful pork.
That gives us a sense of what is coming into and leaving Canada. We are talking about literally hundreds of millions of dollars on an annual basis.
South Korea plays a very important role when it comes to trade with Canada today. The expectations are that with the trade agreement, we will be able to enhance trade between the two countries. There are some industries, the pork industry and aerospace industry being two very important industries for my own province and across Canada, that would benefit from this trade agreement. Having said that, we need to recognize that there are areas we need to be concerned about.
As I have pointed out, this has not been an agreement driven by the Conservative government. It goes back to 2003, when the South Koreans took it upon themselves to move toward world trade agreements.
Canada has actually been very slow in pursuing an agreement. That was back in 2003. At that time, Paul Martin was the Prime Minister, and the Liberal Party was in government. Within a year of South Korea stating its intentions, the government of the day expressed its willingness to begin negotiations.
It is frustrating that the Canadian government made this country such a low priority. It signed some other agreements that involve a fraction of the trade that was being done between Canada and Korea.
Therefore, the Conservative government should not try to give the impression that it is the Prime Minister who has been out courting to get this agreement. That is not the case. Yes, the Conservatives has signed the agreement, but it has a lot more to do with South Korea than it does with the government.
The Liberal Party has consistently recognized the value of trade, and I can go through a litany of Liberal prime ministers. I often refer to the 1960s when we had the auto pact agreement and how Canada benefited the economy and ultimately socially as a result of that. Through the years, we have continued to support the principle of free trade agreements where possible and where it makes sense.
In the last 15 or so years there has been a lot more interest around the world to develop and promote free trade agreements. That is why we have seen a lot more activity. In the late 1980s, it was not the thing of the day, and I made reference to this before.
I recall first hand when I was sitting on the Manitoba legislature and Prime Minister Chrétien at the time talked about how important trade was to Canada. He wanted to go Asia, particularly China, and other countries, and he wanted this team Canada approach. He invited other provinces, stakeholders and so forth to participate in trying to capture new and growing markets to benefit from world trade.
If we look at the governments of Jean Chrétien and Paul Martin, we will see that we had consistent trade surpluses, and that is important.
I have studied basic economic courses and I had the opportunity to talk economics throughout the last 20 years in many different capacities, as well when playing the role of critic in the Manitoba provincial legislature. The bottom line is that a trade deficit is not a positive thing.
If we look at trade in a holistic fashion, what better way than to look at the bottom line? The trade balance is important. If we are on the right side of the balance on the ledger, we will find that we are in a better position to generate good quality-paying jobs. That is what Canadians want.
This is a fight for the middle class. We need the emphasis of our policy, and in setting policy, to benefit our middle class, because the middle class has been hit hard over the last number of years. One of the ways in which we can deal with that is to be more progressive on the trade file.
We cannot be dismissive or passive about a trade deficit and not worry about it. If the Conservatives gave the attention that was warranted in dealing with the trade deficit, we would have had more employment in Canada. The manufacturing industry would not have been hit as hard as it has been in Ontario, where we have lost tens of thousands of good quality manufacturing jobs. No one can convince me that has nothing to do with the trade deficit because it does. There are many things in which the government could be doing that would make a difference, and it is a small point.
We ask questions about infrastructure. Investment in infrastructure allows our companies in Canada to get their product to market that much faster. It allows them to be that much more competitive. Investing in infrastructure is a good, sound economic policy.
We should all be concerned with the overall trade balance. I understand that the only party opposing this trade agreement is the Green Party. It is encouraging to see the flip that the New Democrats have made on trade policy.
Denis Blanchette NDP Louis-Hébert, QC
Mr. Speaker, I thank my colleague for his speech.
One thing always surprises me. Yes, it is good to diversify markets. However, a question came to mind while I was listening to my colleague speak.
Before he even knew what agreement he was dealing with, he said he supported it. He did not really look at the content of the agreement. Furthermore, he is completely surprised that the NDP is supporting a free trade agreement. As we in the NDP are always reminding this House, we have a very structured approach for determining whether or not an agreement is good for Canada.
Given that we have such a structured approach and that one aspect of it involves ensuring that the partner's economy has significant or strategic value to Canada's economy, would he agree that thinking in these terms could help us to improve our trade?
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, there was a time in which there was more difference between the New Democrats and the Liberals, but the New Democrats are trying to become Liberals on the trade issue.
We need to recognize that when the member said whether it was the European Union, that in principle they supported the concept of free trade. This is much like when Jack Layton was the leader of the New Democrats. He would say very candidly, “We oppose free trade agreements”, even if the free trade agreement was not on the table or if there was no context to the agreement at all. At one time, the New Democrats knew that the content did not matter. It was totally, absolutely irrelevant. They just opposed trade agreements. It is only under this new leader that they have made this flip. That is a good thing.
They do not need to try to come up with this justification. That is all they are really talking about is justification. The Liberal Party believes in the importance of environmental and labour laws. We want to ensure that there is a respect for democracy and human rights. The New Democrats are coming up with a justification for their flip-flop. That is all it is.
Robert Chisholm NDP Dartmouth—Cole Harbour, NS
Mr. Speaker, I listened with interest to the member for Winnipeg North as he talked about what Jack Layton said and what the NDP stood for. Maybe he should stick to what his own party stands for.
The problem we have on this side is that with respect to what the Conservative government has done in its trade policy, the Liberal policy tends to be “me too”. The Liberals go along with it. They do not think about it. They do not question it. They do not analyze it. They just want to agree.
What we have talked about here with respect to the Canada-Korea trade agreement, like we have with every other agreement that has been brought into the House, is the merits of it, the provisions, what is contained within the agreement and how it benefits Canadians, Canadian businesses and Canadian workers.
Why does the member for Winnipeg North get so offended when the NDP looks at a deal from a logical and principled point of view before we decide yea or nay?
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, no offence to the member, but I do not believe the New Democrats are being fully transparent on this issue. The reality is quite different in terms of what they have done in the past versus what they say today.
If we use the same logic that the member just talked about in terms of how they thoroughly investigate and base their decisions strictly on the merits of a trade agreement, did that same principle apply when Jack Layton or Ed Broadbent was the leader of their party? Are they saying that the Jordan agreement and this agreement are the only two agreements that Canada has ever signed that are worth supporting? They need to look in the mirror and reflect on what they say if they want to be consistent and honest with Canadians.
Rodney Weston Conservative Saint John, NB
Mr. Speaker, it is a pleasure to rise today to speak to Bill C-41.
Our government is committed to protecting and strengthening the long-term financial security of hard-working Canadians. 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 our government is currently pursuing the most ambitious trade expansion plan in our country's history. The Canada-Korea free trade agreement is a state-of-the-art agreement which covers virtually all sectors and aspects of Canada-South Korea commercial relations, including trading goods and services, investment, government procurement and intellectual property, as well as labour and environment.
The Canada-Korea free trade agreement would result in job creation and enhanced opportunities for Canadian and Korean businesses, particularly small and medium-sized enterprises, as well as investors, workers and consumers.
Today, I would like to speak about how the Canada-Korea free trade agreement would help the Atlantic provinces to expand their businesses and increase their competitiveness in the South Korean market, which presents many opportunities for my fellow Atlantic Canadians.
From 2011 to 2013, Atlantic Canada exported, on average, $64 million worth of goods to South Korea. Through the elimination of tariffs in major sectors of interest to Atlantic Canada, including fish and seafood products, agriculture and agri-food products, rail products, information and communication technologies, industrial machinery and medical devices, Atlantic Canadian goods would become more competitive in South Korea.
The agreement's outcomes in non-goods trade would also help service providers by facilitating business mobility and investors through increased protection and clearer rules. New Brunswick is one of the Atlantic provinces that stands to benefit significantly from the Canada-Korea free trade agreement.
The agreement would bring numerous benefits to New Brunswick, including the province's industrial goods sector. Our industrial goods sector is an important driver of the economy for New Brunswick and it employs about 6,700 hard-working New Brunswickers each year.
From 2011 to 2013, New Brunswick exports of industrial goods to South Korea were worth an average of $7.8 million. The Canada-Korea free trade agreement would eliminate tariffs on all of New Brunswick's exports of industrial goods to South Korea, including tariffs on information technology products which currently face tariffs of up to 13%. It would also eliminate tariff rates on industrial machinery and power-generating machinery, with the current tariff rate of up to 8%.
Tariff elimination would level the playing field for New Brunswickers relative to key competitors from the Untied States and the European Union, and bring substantial export gains to the province.
Nova Scotia is another Atlantic province that would gain considerably from the Canada-Korea free trade agreement. I would like to touch upon the agreement's benefits for the fish and seafood products sector, which provides jobs to more than 9,200 Nova Scotians.
Between 2011 and 2013, Nova Scotia's fish and seafood exports to South Korea were worth an annual average of $23 million. Nova Scotia would benefit from tariff elimination on products such as live and frozen eel from a current rate of up to 27%. Tariffs would also be eliminated on live and frozen lobster, frozen crab and scallops, which have a current rate of up to 20%.
On a point of interest, shipments of lobster from Halifax Stanfield International Airport to Seoul have already begun, with loads this past summer of nearly 40,000 kilograms.
Throughout the negotiations on the Canada-Korea free trade agreement, our government has actively engaged stakeholders to ensure that the agreement best reflects their needs. Stakeholders have provided strong support for the agreement, including the Nova Scotia Fish Packers Association, which is congratulating our government on the agreement with the following statement, “The free trade agreements to eliminate tariffs will seriously open up the markets. I very much applaud the efforts of government to reduce trade barrier”.
I am very excited for the many benefits that the Canada-Korea free trade agreement will bring to the Nova Scotians. That is a pretty strong statement in and of itself.
Prince Edward Island also has a lot to gain from the Canada-Korea free trade agreement, including P.E.I.'s agriculture and agri-food products sector. In 2012, this sector employed about 5,600 people in the province. From 2011 to 2013, P.E.I.'s agricultural exports to South Korea were worth an annual average of $2.6 million. Frozen french fries and pork products were the top export items.
P.E.I. would benefit from the agreement's elimination of tariffs on frozen potato products, which includes frozen french fries, from a current rate of 18%. The agreement would also eliminate tariffs on all pork and pork products of export interest, which range anywhere from 3% to 30%.
I would like to share a quote from the vice-president of Cavendish Farms, a producer of frozen potato products. He said:
...a free trade agreement between Canada and South Korea presents a golden opportunity for us to grow our presence in the South Korean market, and in the Asia-Pacific region as a whole. Free trade helps to support our industry, the workers we employ and the sale of the high-quality products that we’ve been producing for more than 30 years.
The Canada-Korea free trade agreement would bring numerous benefits that would help to boost the economy in Newfoundland and Labrador. The province's services sector, for example, would benefit significantly from the Canada-Korea free trade agreement. This is an important sector for Newfoundland and Labrador, employing some 180,400 Newfoundlanders and Labradorians in 2012 alone and accounting for more than half of the Newfoundland and Labrador economy. The province's key export interests in the services sector include retail and wholesale trade, environment, travel and tourism, construction, and real estate services.
The Canada-Korea free trade agreement would provide services suppliers from Newfoundland and Labrador with greater and more predictable access to the diverse South Korean market. The Canada-Korea free trade agreement contains temporary entry commitments that are the most ambitious South Korea has agreed to in any of its free trade agreements and would go a long way to boosting services exports for the province.
We are standing with Canadians on the Canada-Korea free trade agreement by ensuring that investor protection provisions remain as the cornerstones, as has been the case in all modern trade and investment agreements. We take tremendous pride in our record on free trade agreements, which has put Canada back in the game of trade negotiations. Canadian workers and businesses were at risk of falling behind in this era of global markets, but thanks to the aggressive agenda of our government, we are giving our citizens a competitive advantage.
By continuing to actively pursue broader markets and access to new investment opportunities, our government is providing Canadian businesses and exporters with access on preferred terms to the largest, most dynamic, and fastest-growing economies and regions around the world. No government in Canadian history has been more committed to the creation of jobs and prosperity for Canadian businesses, workers, and their families. Deepening Canada's trading relationships in dynamic and high-growth markets around the world is key to these efforts.
Without a doubt, the Canada-Korea free trade agreement promises many benefits for Atlantic Canada. It would level the playing field for Atlantic Canadian businesses relative to their competitors in the U.S. and the EU. It represents a concrete next step in bolstering Atlantic Canada's presence in the fastest-growing and dynamic Asia-Pacific region.
Today I am asking that all members of the House ensure the speedy ratification of the Canada-Korea free trade agreement, so that hard-working Canadians can start reaping the benefits of this agreement and solidify their presence in the Asia-Pacific region as soon as possible.
Rosane Doré Lefebvre NDP Alfred-Pellan, QC
Mr. Speaker, I would like to thank my colleague across the way. We served together for a while on the Standing Committee on Fisheries and Oceans, always in a spirit of collegiality, a very pleasant attitude which has prevailed here for nearly a week. I am very glad to see that in the House.
We have already stated that the NDP will vote in favour of Bill C-41 at third reading. However, there are a few little things I have noticed. For instance, I am still worried about manufacturing jobs in this country.
Can the hon. member give me some more details? Does he know what kind of protection will be provided for jobs in the automotive sector? As he knows, trade with South Korea is quite substantial, especially in the automotive sector.
Will the federal government be introducing protective measures to ensure that the automotive sector in Canada remains competitive?
Rodney Weston Conservative Saint John, NB
Mr. Speaker, I want to say that I enjoyed my time in committee with the hon. member. It is a committee that is very collegial and certainly continues to be to this day.
To the member's question, I spoke today about what I saw as the benefits to Atlantic Canada in this agreement. I saw a lot of opportunities. I spoke about a lot of opportunities that are there for Atlantic Canadians, and in every agreement there have to be some areas where one sector will do better than the other. We see great opportunity in Atlantic Canada, whether it comes from the seafood and fish products that are produced, the agriculture and agri-food products that are produced, or some of the services that we market around the world, such as industrial machinery. There are different opportunities that present themselves in this market. This is a rich and growing market, and we see huge potential for Atlantic Canada; and for my province alone, the potential is so great. We see a growing market.
As I said earlier, I would ask all members to ratify this agreement so we can get on with it and start taking advantage of the opportunities that lie ahead for us.
Arnold Chan Liberal Scarborough—Agincourt, ON
Mr. Speaker, I want to follow up on the question that my colleague from the NDP raised for the member for . I too want to express my concern, given that I come from Ontario and given the potential impact that this Canada-South Korea free trade agreement may have also on the auto sector, notwithstanding the fact that our party will be supporting this particular deal.
I would like to get my friend's comments with respect to the ultimate accessibility that Canadian manufacturers would have to South Korea, particularly as it relates to the auto sector.
Rodney Weston Conservative Saint John, NB
Mr. Speaker, my riding is Saint John. I just want to clarify that, because people in my area are very particular about that. I just want to make sure that members understand very clearly.
We see a lot of potential with this trade agreement, from my area in particular, from Atlantic Canada's perspective, and from New Brunswick's perspective. New Brunswick is the largest, most export-oriented province for percentage of GDP per capita in the entire country. We are very dependent on trade, and we see a huge potential here. We have opportunities that go far beyond what most could imagine. We see a growing marketplace with great demands, and we look forward to meeting those demands.
The Deputy Speaker NDP Joe Comartin
It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Thunder Bay—Superior North, National Defence.
Jinny Sims NDP Newton—North Delta, BC
Mr. Speaker, it is my pleasure to rise today in this House to speak in support of Bill C-41, an act to implement a free trade agreement between Canada and the Republic of Korea.
Whenever we are looking at free trade agreements, no matter which country they are with, it behoves the parliamentarians and those who are negotiating those agreements to ensure that due diligence is done and that the agreements we end up with are good for Canada. However, we want them to be good for the other country as well, because that is how strong relationships are built in the long run.
On balance, this trade agreement with a democratic, high-standards country is a good deal for Canada and one that the NDP can support. South Korea is an established democracy with high standards for labour rights, human rights, and environmental protections. Its large market offers significant opportunities for Canadian businesses to gain a foothold in important Asian markets and diversify our trade. Just so members know, we believe not everything is perfect and we will say that this agreement is not perfect. There are things we would have liked to see changed in it, but on balance we believe this is a good deal and it would benefit Canadians and would benefit Korea as well.
Unlike another party that sits on this side of the House—a party that, when a free trade agreement was announced, without seeing the details, said, “We approve; we like it; us too”—we actually believe in doing the work of parliamentarians and waiting to see what the deal is, reading it, studying it, and then trying to make it better before we go out and make grand pronouncements. That is what the people who elect and send us here expect of us. They expect us to do the kind of hard work that the NDP is prepared to do.
At this point, let me acknowledge the stoic work done by an amazing member of Parliament from Vancouver Kingsway. He has taken on this file and has been very thorough, balanced, and measured as he has looked at the policies and the agreements that have been presented to this House. He has put forward thoughtful amendments at committee and, now that it is here, has recommended to the caucus that after his thorough investigation, this is a good deal. That is the kind of work parliamentarians expect from all parties; not the “me too” attitude of the party at the other end of this House.
As members know, we do not always agree with the government on the other side or with our colleagues at the other end, so when we are looking at free trade agreements, we actually have some criteria and we examine free trade agreements against the criteria we have established.
The first criterion is this. Is the proposed partner one that respects democracy, human rights, adequate environmental and labour standards, and Canadian values? If it does not have those rights yet, is it on a trajectory that is moving it toward human rights, labour rights, and environmental rights?
The second criterion is this, and my colleagues at the end of this side could actually learn from doing this kind of homework. Is the proposed partner's economy of significant or strategic value to Canada? These are all very important.
The third one is this. Are the terms of the proposed deal satisfactory?
We have a measured approach, and I am proud of the way we do it.
It is important to note that we did have some concerns with this agreement, and I want it to be noted that once again at committee it was NDP members who did their homework and the hard pulling. It was NDP members who moved amendments based on our concerns over the provisions for investor state dispute settlement. We were very concerned.
However, we were pleased that in this case, unlike the case of the Canada-China FIPA, the agreement would not keep the hands of government tied for 31 years. This agreement can be renegotiated or cancelled after six months. Unlike the other FIPA, the Korean free trade agreement has guaranteed transparency rules for ISDS tribunals. Hearings must be in public. We still expressed our concerns about that, but the other party said it was quite willing to live with that provision.
We also have some major concerns around the auto industry. Once again, it was the NDP and only the NDP doing the hard work that we do as parliamentarians. We brought amendments at the committee stage in order to strengthen protection for the auto industry.
I would like to welcome my colleague across the way, who is new to Parliament. He raised the question as if to say that we had abandoned the auto industry. In fact, it was NDP members who brought forward amendments that would provide further protection for the auto industry.
We have serious concerns about other free trade agreements, but on balance we are prepared to live with this one because it does have a six-month opt-out rule. However, both CETA and the China FIPA have provoked widespread public concern in Canada. I do not know about other members when they go home to their constituencies, but this is a topic I get asked about over and over again.
People feel that parliamentarians, especially members from the government across the way, are giving away too many Canadian jobs and are not doing their due diligence. I want to reassure them that a New Democratic government would pursue policies to strengthen the Canadian auto sector, including policies that would encourage Korean automakers to locate production facilities right here in Canada. Decent paying jobs would assist the Canadian auto sector to better access the Korean and other Asian markets.
We would closely monitor non-tariff barriers and act quickly and effectively to resolve disputes. Of course the relationship, as with any relationship, has to be nurtured, and we would utilize frequent trade missions to Korea to cement that relationship.
We realize that this agreement with Korea is a major agreement for us, and it does give us an entry into the Pacific gateway, but we also agree with the Canadian Chamber of Commerce and others that the government needs to do more than just sign trade agreements: we have to do our due diligence and make sure that these agreements will benefit Canadians and not put some of our sectors at risk.
We must do more to promote Canadian exports as well. It is a major job to attract investments and help Canadian companies penetrate the South Korean and other Asian markets.
As members know, the UFCW, one of our major public sector unions, has spoken in favour of this trade agreement. The UFCW can see the benefits of it for our fisheries industry, whether that be lobster, tuna, or salmon. We will make financial gains.
When the NDP forms government, we will work to strengthen this free trade agreement so that it benefits everyone.