Mr. Speaker, I am pleased to rise today to speak to the Canada-Korea free trade agreement. I will have the opportunity to speak at length about why the NDP believes, all things considered, that it can support this agreement with a democratic country whose economy has high standards. I am not saying that everything is perfect, because that is not the case. If the members on this side of the House had been at the negotiating table, we could have done things differently.
Before I get into the compliments, I want to start with some criticism. Our colleagues opposite like claiming that they are the champions of all things trade. However, the data on this topic shows a different story. Since 2000, Canada's trade balance has experienced a sharp decline and it has been consistently declining since 2004. To be more specific, we went from 5.75% of the GDP to a deficit of 0.61% of the GDP. I do not understand how the government can seriously claim that it is effective and committed to trade when it gets such poor results for our exporters.
I am getting off topic. Let me get back to Korea. I remind members that Canada is lagging behind compared to other countries and major economies in terms of trade with Asia Pacific countries, and in particular Korea. While Canadian companies had to wait for the never-ending negotiations to come to a close, the United States and the European Union had already signed free trade agreements with South Korea in 2012.
Over these two years, our exporters lost 30% of their share of the South Korean market. What is worse is that the government dragged its feet and chose to sign bad agreements with trade partners that have questionable human rights records, such as Honduras, which we have already talked about. I am bringing this up today because this very issue came up in internal memos at the international trade department.
It is rather absurd to see that the government insists on negotiating agreements that legitimize bad working-condition and human rights practices, when doing a better job with Korea would have helped our exporters much more quickly. Our exports to Honduras in 2013 were just over $43 million. With Korea, we are talking about $3 billion a year in potential exports.
I have some serious questions about the government's priorities. Why wait 10 years to negotiate with South Korea? Why give priority to less developed economies and smaller trading partners?
I have other questions as well. What did our exporters lose because of this delay? How many jobs could have been created or maintained? We will not get a trade policy that works and helps our economy, our companies and, especially, our workers by signing any old agreement and then bragging about how many of them there are afterwards. Instead, we should be signing good agreements and supporting our exporters.
This government likes to paint the NDP as a party that is fundamentally against trade and supports blind protectionism. Therefore, I will once again try to explain to the Conservatives the criteria that the NDP has developed and that shape its position on international trade. Perhaps it will clarify things.
Unlike the other major parties in the House, we carefully analyze each agreement, then we support or reject it based on its merit. The criteria we use are completely logical and legitimate and reflect our social responsibilities as a developed country.
The first criterion concerns respect for democracy, human rights, environmental values and labour condition standards. Based on this criterion, South Korea has made significant progress since the dictatorship fell in 1987. It is now a democratic and multi-party political regime that supports freedom of expression in a relatively diverse society. In terms of labour standards, sweatshops are not common practice, far from it. Wages are adequate, and labour movements and unions are not openly suppressed or delegitimized.
I believe that my colleague said it before me, but for information purposes, South Korea rates 15th on the United Nations human development index. Social programs are also being developed in South Korea, particularly access to post-secondary education and energy strategies, while corruption is at a minimum. Therefore, this agreement meets this first criterion, which covers human rights.
Our second criterion relates to the overall economic and strategic value of this alliance for Canada. We could talk about this criterion in terms that the government could understand by looking at the Investment Canada Act, for instance. We are asking the same questions. Is this agreement in the best interests of Canada? However, instead of relying on the arbitrary opinion of just one minister, we are assessing and quantifying this criterion in light of the global economy and trade figures.
The answer to the question about the objective meaning of the partnership is clearly positive. South Korea is Canada's seventh largest partner and the third largest economy in the Asian market. Canada's trade exports with South Korea are essentially the same as those with France or with Germany. We are talking about $3.4 billion in 2013.
In economic terms, this agreement could be fruitful for Canada, given that Korea is an attractive gateway to other Asian economies. In addition, our two economies are quite complementary, which means that not many of our industries will be in direct competition. That is an important point.
In addition, virtually all the economic sectors in Canada welcome the agreement and will very likely derive substantial benefits from it. These sectors include the aerospace industry, the high tech sector, the shipping industry, the forestry sector, the mining sector, the agricultural sectors—namely the hog, beef, wine and grain industries—and the seafood industry. We therefore recognize that this agreement has strategic value and meets the second criterion.
The final criterion relates to the practical terms of the agreement. We need to read an agreement before we can approve it. It is a signed contract between two nations. The details of the agreement are very important, and that is why it is inconceivable for us to support or reject an agreement without having even read it. We therefore took the time to read the terms of the trade agreement between Canada and South Korea.
Are the specific terms of the agreement satisfactory? Will they be advantageous for Canada or not? As was mentioned earlier, the two countries will essentially be on equal footing thanks to our complementary economies and South Korea's improvements in the areas of human rights, environmental standards and treatment of workers.
Speaking of workers, we are not the first country to sign a free-trade agreement with South Korea. Many countries have done so before us, including the United States. Earlier, I mentioned the fact that our economies complement one another and that work conditions are good. Many large union groups, such as the UFCW, have thrown their support behind the agreement between Korea and the United States because it has the potential to create thousands of jobs. What is more, those jobs will be local, well-paying jobs in sectors of the economy where the jobs are often unionized. They support the agreement between Canada and South Korea.
To continue, I will now explain why this agreement meets our criteria and why we will be supporting it at second reading. For a while now, it has been recognized and often stated that Canada must diversify its trade partners and try to reduce the percentage of trade that it conducts with the United States and the European Union, its traditional partners.
In light of that, it makes sense to strengthen ties with South Korea, which is our seventh-largest trading partner. In fact, when it comes to Asia, we need to be talking about the entire region, not just Korea. South Korea is our third-largest trading partner in Asia, and it is important to expand trade with the country. The NDP recognizes that increasing trade with Asia is a crucial step towards ensuring prosperity, economic growth and dependable jobs in Canada in the 21st century.
Korea is also a gateway to the rest of the Asian market. Under this agreement our exporters will have more and better opportunities in the Asian market. This will be good for our economy and for diversifying Canada's international trade.
Unlike other countries that Canada has signed agreements with despite the NDP's objections, such as Honduras, South Korea is a well-established, globally recognized democracy. Supporting a toxic, authoritarian regime that violates its citizens' rights is not even an issue in this case. In other words, this is exactly the kind of developed economy that we should be developing a deeper, more sustainable trade relationship with. It has high labour and human rights standards, and it is the kind of partner we should be looking for.
When we trade with other nations, we have to think about the goods that will be traded, that will travel from one country to the other, but we also have to think about what we are supporting with that trade. In the case of Honduras, I spoke at length in the House about how the agreement would support a country that is heading the wrong way in terms of human rights, a country where, in most cases, workers struggle with terrible working conditions.
Those concerns do not apply to Korea. Instead, this is a partner that shares our values of democracy and justice. By doing business with Korean companies, Canadian exporters will be working with partners who understand their obligations in terms of working conditions and how employees should be treated.
Consider how easy it is for a Honduran company to lower its labour costs and provide a dangerous working environment for its employees. How can we ask Canadian companies to accept that a foreign competitor can be subject to domestic regulations that are so radically different from our own? With South Korea, our companies will be dealing with partners and competitors who are subject to very similar regulations and whose reality is the same.
That is really good, because even by purchasing Korean products here, our consumers will be giving their money to responsible businesses that have good practices.
That is not the case in some other agreements. It is also important to remember the environmental aspect. Korea has high environmental standards and is a world leader in that regard. It leads the world in renewable energy and green technology, and it is in our interest to boost our trade with these sectors, which are so important for the future. The Koreans are offering us this opportunity, and it just seems logical to me that we should take it in order to increase the portion of our economy that depends on greener power. This will be quite a change from what we are doing now.
We are definitely not the only ones who think this agreement could be good for the Canadian economy. A number of industry associations in sectors including aerospace, agriculture and agri-food, fish and seafood, chemicals, energy, forestry and financial services also think so.
This agreement is good news for our agriculture sector, because it will enable our pork and beef producers not to expand their presence on Korean markets, but actually recover lost ground. For instance, Canadian beef exports to South Korea dropped from $96 million in 2011 to just $8 million in 2013. Canadian pork experts dropped from first place on the South Korean market to fourth place between 2011 and 2013. The free trade agreement with South Korea will eliminate nearly 87% of agricultural tariff lines and finally allow Canadian exporters to play on a level playing field.
It is becoming increasingly urgent to conclude this agreement before Australia's trade deal with South Korea is implemented, because Australia is one of our major competitors in agriculture.
As for seafood, fishers on both coasts will benefit. Current tariffs are 47%, and most of them will be eliminated. Fishers and processors on the west coast can barely keep up with their competitors in Alaska because of the trade agreement that already exists between the United States and Korea.
Some 230,000 jobs in the country depend on forestry. It is also important to my riding, Rimouski-Neigette—Témiscouata—Les Basques, where the sector has gone through some tough times. Canadian exporters currently face tariffs of 10%, which will disappear with the agreement.
In light of all these facts, it seems that the free trade agreement with South Korea satisfies our three criteria. I am quite proud that we took the time to do this analysis instead of just sticking to a purely ideological approach like some parties that are prepared to sign any agreement no matter what or other parties that approve these agreements without even reading them. Only the NDP has a sensible, balanced approach to trade. We are the only ones who want to ensure that trade agreements with other countries will truly benefit Canadians.
Now that I have gone over the positive aspects of the agreement, I want to be clear that it is not perfect. The agreement in its current form is not something we as a government would have signed. Let us talk about the automotive sector. There are some positive aspects, of course, such as the elimination of the 6.1% tariffs on imports and the 8% tariffs on exports. This will be good for consumers here, and also for our exports to Korea. Other positives include the rules of origin provisions that recognize Canadian-U.S. integrated products, which is vital to our manufacturers. The same goes for the accelerated dispute resolution mechanism, which will make it easier to lift non-tariff barriers.
There are also some legitimate concerns about the automotive sector. That is why an NDP government would do everything in its power to allay those fears and mitigate the potential consequences by encouraging Korean automakers to set up plants here in Canada and helping Canadian automotive products access the Korean market more easily. We should monitor non-tariff barriers closely, act swiftly and effectively to resolve disputes, and conduct frequent trade missions to Korea. That is why I would like the government to explain how it plans to mitigate the consequences for the automotive sector, especially since the conditions it obtained are less favourable than what is in the American agreement.
Yesterday, when we announced our support for this agreement, my colleague, the member for Vancouver Kingsway, clearly said what I mentioned earlier: this is not the agreement that we would have negotiated. The biggest problem with this agreement is obviously the investor-state dispute resolution mechanism. An NDP government—just like the main opposition party in Korea—would not have included this mechanism in the agreement. When the NDP is in power after 2015, we could perhaps negotiate with the government of Korea to remove this provision.
The principle of these investor-state mechanisms is cause for concern and rightly so in many cases.
Consider the Canada-China foreign investment promotion and protection agreement. It took the government a long time to negotiate the agreement and then to ratify it after it was announced. My colleague from Skeena—Bulkley Valley just mentioned that in a question.
This investment protection agreement has a number of flaws. First, it is not a reciprocal agreement and it clearly favours China. We mentioned that in several speeches. Even if the agreement had to be cancelled, Chinese firms could sue the Canadian government before secret tribunals for 31 years. That is another major flaw of the agreement.
Furthermore, China could continue to impose conditions concerning local preferences, such as suppliers and jobs, whereas Canada could not. The fundamental issue of reciprocity is involved here.
Finally, the Conservative government was not even able to negotiate national treatment for any new Canadian investment in China—not for companies already in China, but for all new investment made after the agreement is signed.
The investor-state dispute resolution mechanism in the Canada-Korea free trade agreement is different. It is 100% reciprocal, as is the rest of the agreement. What is more, if the agreement is cancelled, it ceases to apply after only six months, not after 31 years, as is the case with the foreign investment promotion and protection agreement between Canada and China.
Furthermore, this free trade agreement with Korea contains transparency measures. Some hearings will be public and teams of experts may even allow third parties who are not directly involved in the dispute to make presentations or submit written briefs. Civil society and non-governmental organizations can therefore get involved. There are no such measures in agreements such as NAFTA or previous versions of this type of investor-state provision.
The dispute resolution mechanism in the agreement with Korea is also faster. For example, chapter 11 of NAFTA provides for a period of 90 days between the date that the claim is submitted and arbitration. The disputed measure must be in effect for at least six months. The technical summaries that we received for the Canada-Korea free trade agreement indicate that the timeframe will be shorter and that things will move faster in cases involving fresh produce or motor vehicles.
That is why, despite this negative aspect, there are advantages to the Canada-Korea free trade agreement that outweigh the disadvantages.
After conducting a complete and comprehensive assessment of this agreement, we decided to support it. It is not the agreement an NDP government would have negotiated. However, we find it acceptable.
Ultimately, we believe that this agreement will be good for Canada and our exporters. It will have a positive effect on the forestry and agricultural industries in my riding and those of many other members on this side of the House.
However, I want to emphasize that the government should tell us about its plan for one of the industries that will be the hardest hit, the automobile industry. We still have not heard any answers from the government in this regard.
The NDP's prudent and balanced approach is the right approach, and it should be used so that trade agreements benefit our exporters, our economy and our workers.
It is imperative that we have a healthy debate in the House. However, when I listen to the Conservative members' speeches, and particularly their answers to our criticisms of the agreement, I can see that they do not feel they should have done anything differently.
In internal memos, officials with the Department of Foreign Affairs and International Trade were critical of the fact that the department's resources were focused on less strategically important agreements than the one with Korea, for example. That prevented us from concluding the agreement as quickly as we could have.
The United States and the European Union have had trade agreements with Korea since 2012. We lost considerable ground because of the government's strategic choice, which I do not understand. In all honesty, the government has not managed to explain this choice to me.
For example, beef and pork exporters who had extremely well-established niches in Korea lost that initial advantage because the government was slow to act.
I will soon take questions from Conservative members, I hope, and probably from other members of the House.
I would like them to keep in mind that no party in the House is perfect, the process itself was flawed and the government should learn from its mistakes so that it can be much more effective in future trade agreement negotiations.
