Debates of Sept. 30th, 2014

Canada-Korea Economic Growth and Prosperity Act

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

Mr. Speaker, I would like to ask my hon. friend from Winnipeg North about an aspect that is often confused with trade agreements but has nothing to do with liberalizing trade and has everything to do with putting foreign corporations in a superior position to domestic government, and those are what are referred to generally as investor state agreements. As the member may know, the Green Party opposes investor state agreements because, by their very definition, they are anti-democratic.

I know there are some concerns within the Liberal Party, but it seems members are generally in favour of investor state agreements, and I wanted to ask my friend from Winnipeg North if there are any limitations on Liberal Party support for investor state agreements such as the Canada-Korea agreement we have before us now?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I am not too sure of the terminology of investor state agreements that the member is referring to. I will take her at face value. Obviously in any sort of an agreement there are always certain aspects that raise concerns. What we are talking about is the overall principle of having free trade agreements, and the benefits to Canadians as a whole have been, generally speaking, very positive.

There are always going to be concerns. When I think of the Korea agreement, for example, one of the biggest concerns that I and members of my caucus have is in regard to the automobile industry. We are very sensitive to that industry and the needs of that industry. This is an industry where, again, through time, we have seen very progressive, liberally minded prime ministers talk about ways in which we can expand that industry and complement it.

Whenever there is a trade agreement, one of the more responsible things to do is to look at where and how that agreement would impact real jobs here. For example, in the Korea agreement, part of the concern I have, and I know many of my colleagues share it, is the automobile industry. When we talked about the European Union agreement, I raised the issue of the impact on cheese sales. There are always going to be different aspects of an agreement, but in general I believe that free trade agreements are a positive thing and we have to recognize that in principle.

As for the point of order from my New Democratic Party colleague, this is the first time in all the months or years of my challenging the NDP that they have actually suggested a date. I look forward to doing the follow-up and I will look into that date. I would be shocked to find that all the members of the New Democratic caucus actually voted in favour of that agreement. However, I will wait and do a little research on that date. I was encouraged. This is the first time in which an NDP member has actually stood and declared a date, but I would still be surprised if every member of the New Democratic caucus actually voted in favour of a free trade agreement.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, it is always a privilege and honour to rise in the House. This morning I rise to speak on this historic free trade agreement between Canada and Korea.

I am delighted to be sharing my time with my hon. colleague, the Parliamentary Secretary to the Minister of National Revenue and for the Atlantic Canada Opportunities Agency, and member for South Shore—St. Margaret's, with whom I have had the opportunity to be on the trade committee for the last eight and a half years. He used to be the parliamentary secretary to the trade committee as well, and so we have a good working relationship. He also has a thorough understanding of the importance of this agreement for not only his constituents but all Canadians.

I want to touch on some of the aspects of this free trade agreement and how it would strengthen our trade and investment ties across the Pacific.

This agreement would increase the prosperity of both countries and 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.

I do not think members will find any government or any prime minister in Canadian history who better understands the importance of trade to our economy. Trade represents one in five jobs and accounts for approximately 60% of our country's annual income. We also 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.

As I said, no government in Canada's history has been more committed to the creation of new 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.

I would also like to thank the opposition parties for their understanding and support of why it is important to ratify this agreement quickly and have it implemented by January 1, 2015.

I worked together with my honourable colleague across the aisle, the member for Vancouver Kingsway and the NDP official trade critic, who stated last week in this House that:

This agreement offers the opportunity for Canadian producers and exporters to increase trade with a modern democratic country with a high-income complementary economy.

He went on to say that:

It will level the playing field for Canadian exporters, who can compete with the best in the world....

Finally, he said:

There is no doubt that Korea is both a significant and a strategic economic partner for Canada.

I could not agree more, and in that regard I would like to highlight the key elements of our trade strategy for Asia and South Korea.

The economic potential of Asia is immense, with a constantly evolving political transformation and a monumental demographic shift. Asia is important to Canada because it offers new opportunities to expand Canada's economic prosperity.

The importance of this agreement is that it would be the gateway to the Asia-Pacific, which has a population of 50 million-plus. This agreement would open the doors. That is why our government has taken such a rigorous and strategic approach to trade with Asia.

My hon. colleague, the Minister of International Trade, has travelled numerous times to various parts of Asia, including the conclusion of this agreement with South Korea and the pursuit of agreements with India and Japan. He will be leading a delegation to India next month. These agreements would lead to increased trade and investment, enhancing Canadian prosperity for generations to come.

Investment is a key driving force for economic growth and competitiveness in Canada. Canadian companies that invest overseas can expand their client base significantly and bring capital back into Canada, which can create jobs. Foreign companies that invest in Canada create jobs as well, boost our economy, and contribute to economic growth that benefits all Canadians.

While Canada and South Korea enjoy a strong investment relationship, ample scope remains for further growth in both directions.

South Korea's direct investments into Canada have risen from $397 million in 2005 up to $4.9 billion by the end of 2013. South Korea is the twelfth-largest investor country in Canada and the fourth from Asia.

South Korea is one of the world's great science and technology powerhouses. I am very interested in innovation and technology, and I had a chance to visit Taiwan a couple of times, as well as Korea, earlier this year.

South Korea has one of the highest expenditures on research and development, R & D, as a share of GDP among OECD countries, spending 4% of GDP. While most private sector R & D takes place domestically, South Korean companies have begun investing in research centres overseas, including Samsung in my home province of British Columbia. Others are becoming more active in utilizing overseas R & D staff and resources.

With this agreement's investment-related provisions and Canada's world-leading, cost-effective R & D environment, Canada would become an even more attractive destination for South Korean R & D investment.

Other examples of South Korean companies' continued interest in Canada are not hard to find. KOGAS, South Korea's national gas company, has already invested heavily in a Canadian LNG project.

My colleague across the way will be interested in knowing that Green Cross, a South Korean biopharmaceutical company, will be opening a new company, a manufacturing facility in Montreal, as it breaks into the North American market. For these companies and many more, Canada is the destination of choice.

Something that is near and dear to the constituents in my riding of Kelowna—Lake Country and to wine lovers across Canada is also something that is very appealing to the palate of the people of South Korea, and that is our great Canadian icewine.

As I alluded to, I had the opportunity and the honour of travelling with the Prime Minister and the Minister of International Trade on March 11 to Seoul, Korea, for the signing of the free trade agreement with President Park. It was an historic moment and an incredible experience. At Blue House, President Park's house, we were able to enjoy a toast of Canadian icewine, which was the icing on the cake.

A champion of the Canadian wine institute is the president, hard-working Dan Paszkowski, who indicated:

The Canadian wine industry is pleased to support the Government of Canada in its work to finalize negotiations for the Canada-Korea Free Trade Agreement. South Korea is an important market for Canadian wine producers, as evidenced by the significant growth in the value of Canadian icewine exports, which increased nearly 25 percent between 2012 and 2013. With a successful FTA, the Canadian wine industry anticipates even stronger export growth in the coming years.

I recently spoke with Dan, who said that about 95% of the market right now is the export of icewine to South Korea, but there is a huge potential for other products once the South Korean community starts to taste our product. Something of interest is that the highest price point for red wine is South Korea. These are great things to raise our glasses and cheer about in the future with this agreement.

In other investments abroad, Canadian direct investment in South Korea has fluctuated over the years. We have seen an upward trend in recent years. Specifically, at the end of 2013, Canadian investment stock in South Korea was at $534 million, up from $390 million in 2012.

Canadian companies continue to show increased interest in investing in South Korea. Major Canadian companies such as Magna International, Bombardier—whose facility in South Korea and we had an opportunity to tour with the Prime Minister—and Pharmascience have already invested in South Korea, and more investments and partnerships are on the horizon. Just this past May, the clothing brand Joe Fresh announced it would open its first store outside of North America in Seoul, with plans to open nine more retail outlets in the South Korean capital by the end of the year.

This agreement will level the playing field for Canadian companies in the South Korean market, which we all agree is important. Canadian businesses can compete with the world when they are on a level playing field.

The agreement sets out transparent and predictable rules, something also very important for businesses. They want stability, predictability, and transparency.

The agreement will ensure that Canadian businesses in South Korea will be treated no less favourably than South Korean businesses. It will protect Canadian businesses from discriminatory treatment and provides access to an independent international investor state dispute settlement mechanism. The same rules will apply to South Koreans investing in Canada, further increasing the attractiveness of Canada as an investment destination. I do not think anybody would disagree with each country being treated the same way, respectfully and with the same rules. These rules have been a standard feature of Canada's comprehensive free trade agreements since NAFTA and have been shown time and time again to be in our national interest.

For Canadian companies that invest abroad, there is no substitute for being on site where their clients are. Canadian companies that invest in South Korea will now find it easier to have their professionals on site in South Korea. The agreement will provide new preferential access for professionals from both Canada and South Korea and will facilitate greater transparency and predictability for the movement of businesspersons between the two countries.

Our Conservative government is committed to protecting and strengthening the long-term financial security of hard-working Canadians. Thanks to these actions under our government's free trade leadership, Canadian workers, businesses, and exporters now have preferred access and a real competitive edge in more markets around the world than at any other time in our history.

The global market is shifting. More companies are looking to Asia for growth. The South Korean market provides a landmark opportunity for growth in neighbouring markets in Asia, Japan, and China. This agreement will provide fair access to the whole South Korean market and ensure continued growth for Canada.

Trade has long been a powerful engine for Canada's economy, and it is even more so in what remain challenging times for the global economy. By continuing to actively pursue broader market access and new investment opportunities, we are providing Canadian businesses and exporters with access on preferred terms to the largest, most dynamic, and fastest-growing regions around the world.

I would ask for a quick ratification of this agreement by all parties.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, Canada has an agreement with Korea, a country that respects human rights. For example, the agreement will help improve working conditions in a number of sectors, including the aerospace industry.

In Canada, manufacturers are closing their doors. Companies are trying to extract minerals from the earth, but sooner or later, there will be none left.

In addition to the agreement that will improve things for the aerospace industry, does the government plan to do anything to ensure that the industries of the future—which create good unionized jobs—can grow and diversify our economy so that it does not depend solely on natural resources?

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, aerospace is something that is near and dear to my riding of Kelowna—Lake Country. Kelowna Flightcraft is the largest private employer in my riding. Aerospace and aviation, with their innovation and technology, are sectors that are very important to Canadian communities across the country.

Canadian companies are leading the way. Jim Quick, the president and CEO of the Aerospace Industries Association of Canada, said:

Our industry depends on exports and access to international markets to remain competitive and continue creating jobs and revenues here at home. This agreement is imperative to restoring a level playing field for Canadian firms in the South Korean market, which is especially important given the considerable growth the aerospace industry will see in the Asia-Pacific region in coming years. We congratulate the Government of Canada on this achievement, and thank its representatives for their ongoing commitment to boosting Canadian competitiveness in international markets.

As we can see, the aerospace industry is very supportive of this agreement. It would benefit all of us across Canada.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I would like to thank my colleague from British Columbia for his great speech outlining many of the benefits of the Canada-Korea free trade agreement.

All of us in the House know that during the 12 months following the Korea-U.S. agreement, our exports to Korea dropped dramatically. One of the sectors that was impacted most severely was the agricultural sector. In fact, in Ontario, there are current tariffs on pulses of 607% and of 30% on pork.

In my riding one of the producers, which is co-operatively owned and produces processed pork, knows that its exports stand to rise dramatically with the signing of the Canada-Korea free trade agreement. I am sure that if my colleague had had more time, he would have outlined many of the other agricultural areas in British Columbia that would benefit as well from the signing of this agreement. Could he take a few minutes to outline some of those benefits?

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, I would like to thank my hon. colleague for the question and for his hard work for his constituents in his riding of Kitchener—Conestoga, another innovation centre in our country.

This agreement is very important for agriculture in British Columbia specifically. My riding has vineyards, orchards, and a variety of different crops. There would be a reduction of up to 45% in tariffs for blueberries and cherries, for example. I know that the vice-president of the BC Cherry Growers' Association was very excited about this development. The Minister of International Trade is also the member for Abbotsford, which is the blueberry capital of Canada. He is also very excited.

In agriculture and agri-foods, there is a 10% tariff to be removed on frozen rays, skate, whitefish, sole, flounder, salmon, frozen crab, and seafood. We are looking at other agricultural products throughout Alberta, such as wheat. The pork and beef industries are going to be big winners. Of course, the Canada-U.S. agreement took a lot of that market away, so we are going to get our market share back to our customers through this bilateral agreement with South Korea.

Agriculture is a big component, as is seafood from both the Pacific and the Atlantic.

Another winner will be the forest sector. I have Tolko mills in my riding, so it is a win-win all around the country.

[Gerald Keddy, Conservative, Parliamentary Secretary to the Minister of National Revenue and for the Atlantic Canada Opportunities Agency]

Mr. Speaker, it is as real pleasure to rise in the House today to speak to the Canada-Korea free trade agreement.

Before beginning my comments, I would like to thank my colleague from Kelowna—Lake Country not just for his support for this particular agreement but also for his work on trade and on behalf of Canadian exporters during his tenure on the trade committee.

This free trade agreement is an ambitious state-of-the-art agreement covering virtually all sectors and aspects of Canadian-Korean trade, including trade in goods and services, investments, government procurement, intellectual property, labour, and environmental co-operation.

This free trade agreement, Canada's first with an Asian country, is yet more proof that our government is focused on creating jobs and opportunities for Canadians in every region of the country.

I would particularly like to focus on benefits of the Canada-Korea free trade agreement to Canada's fish and seafood industry. Surrounded by the Arctic, Atlantic, and Pacific Oceans and home to the Great Lakes, Canada has one of the most valuable fishing industries in the world.

In 2012 alone, the fish and seafood industry contributed more than $2.2 billion to Canada's GDP and provided some 41,000 jobs for hard-working Canadians. It is also the economic mainstay of approximately 1,500 communities in rural and coastal Canada.

Canada exports most of its fish and seafood. It is the world's seventh-largest exporter of fish and seafood products, exporting an estimated 73% by value of our fish and seafood production.

Asia is an important market for Canadian fish and seafood products, and with this dynamic market, it is rapidly growing in importance in global trade.

Canada has a proven ability to export to Asian markets, including South Korea. Between 2011 and 2013, Canada exported an average of $49 million in fish and seafood products to South Korea. However, there is still much room to grow in this vibrant Asian market, and Canada must act now.

I must say that during this debate I was able to listen to the words of the MP for Winnipeg North, although he mainly concentrated on volume and was a little light on facts. I have heard in this House that all of the parties intend to support this trade agreement and I thank the opposition parties for that.

However, let us be clear on the Liberal record on trade: in the 13 years they were in government, they signed three agreements. We have been in government for eight years and we have signed 43 agreements. There is no comparison.

Times were good when the Liberals were in government. The dollar was low and exports were high. It was not anything they did that caused that; rather, it was the free trade agreement signed by Brian Mulroney's government that caused that increase in dollars in the country. However, the danger of doing nothing in the good times was that when the recession hit in 2008-2009, we were left in a virtual trade deficit. We had to work extremely hard to find markets for our exports, and Canada is an exporting nation.

We took the risk of falling behind. We have not fallen behind. We have actually caught up; now we are moving forward again, and times are getting better.

Canadians well remember that the last time the Liberals tried to talk seriously about trade, they campaigned to rip up the North American Free Trade Agreement. I was happy to see that once they got into government, they forgot their campaign promise, and Canada was actually able to move ahead on that.

Once fully implemented, the Canada-Korea free trade agreement would eliminate South Korea's tariffs on all fish and seafood products. South Korea's tariffs in this sector, which include fresh, frozen, and processed fish and seafood, run as high as 47%. With the elimination of tariffs, Canadian products would become more competitive, allowing Canadian firms to increase exports in this dynamic market. As we know, exporters from the U.S. and the EU are already benefiting from preferential access to the South Korean market.

Some of the products that would benefit from immediate tariff elimination include frozen lobster and Pacific and Atlantic salmon, whether fresh, chilled, frozen, or smoked. They currently have duties of up to 20%.

In all, 70% of fish and seafood tariff lines will be duty free within five years of the agreement's entering into force. All remaining duties in this very sensitive Korean sector will be entirely eliminated within 12 years.

The outcome for Canada's top fish and seafood export interests is on par with or better than those agreements obtained by the U.S. and EU. Compared to the U.S., for example, Canada obtained stronger results for fish and seafood for roughly half of Canada's key exports, including lobster, hagfish, and halibut. By year five, Canada will have duty-free access for more fish and seafood products than either the EU or the U.S. will have at their five-year mark under their respective FTAs with Korea.

The benefits do not end there. In addition to tariff elimination, this agreement contains robust provisions that will ensure that Canadian fish and seafood exports are not undermined by unjustified trade barriers. The chapter on sanitary and phytosanitary measures negotiated with Korea is a good example. In this chapter, Canada and Korea have agreed to build on their shared commitments under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. The chapter fully recognizes the rights of the WTO members to take the sanitary and phytosanitary measures necessary for the protection of human, animal, or plant health, as long as they are based on science and are not used as disguised measures to unnecessarily restrict trade. Far too often we see phytosanitary measures becoming non-tariff trade barriers. The agreement we have signed with Korea should prevent that from happening. It also establishes a committee of experts who can collaborate and consult on phytosanitary issues to enhance bilateral co-operation. The committee will provide a forum in which issues can be discussed and resolved before they become major problems.

At this time, I would like to take a moment to elaborate on the benefits pertaining to lobster. Lobster is an iconic Canadian crustacean, Canada's top and most valuable export in the fish and seafood sector. It is certainly an important product in my part of the world, in southwestern Nova Scotia. The south shore, along with West Nova, are the main lobster exporters in Canada. In 2013, Atlantic Canada's exports of lobster were worth $888 million and accounted for 95% of all Canadian lobster exports. Canada's exports of lobster to South Korea were worth an average of $18.2 million annually between 2011 and 2013. Again, we accounted for nearly 37% of Canada's total seafood exports to South Korea.

Current duties of up to 20% on lobster products faced by Canadian exporters will be totally eliminated. This summer we got a taste of what increased lobster trade with South Korea will look like. Korean Air Cargo launched weekly service to South Korea from Halifax to transport an expected minimum of 40,000 kilograms of live lobster. This happened only a few months after the announcement of the conclusion of negotiations on this agreement. This is the type of opportunity that can be generated across this country from coast to coast to coast.

Given the many benefits of the agreement, the stakeholders from the fish and seafood industry have shown great support for the Canada–Korea free trade agreement.

I will quote the Lobster Council of Canada, which supports the agreement:

...it will greatly enhance our industry's competitiveness in South Korea. Tariff elimination and improved market access for lobster exports helps to ensure long-term prosperity of our industry and the thousands of people it employs in [Nova Scotia].

It is not just about Nova Scotia. We have a huge inland fishery in Canada, worth nearly half a billion dollars, in the Great Lakes, Lake Winnipeg, Great Slave Lake, and Great Bear Lake. We have a major fishery in the Arctic Ocean for arctic turbot. We have a fantastic fishery in British Columbia. We are surrounded. We have a very viable wild fishery in this country and an aquaculture industry that will now have a marketplace for its products. For B.C. halibut and arctic turbot, we are looking at a reduction in tariffs of 10%. That is a huge difference for these fishermen and plant owners.

This is a great agreement. This is a smart agreement for Canada, and it is a great agreement for fish and seafood.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Mr. Speaker, we are talking about the Canada-Korea agreement. The NDP leader has considerable experience from decades as a provincial minister and in government and the public service. We can trust him to develop trade and economic policies for Canada. The Conservative government is tired and corrupt. The NDP is ready to work at finding real solutions to the real problems facing Canadian families.

Does my esteemed colleague agree that this introduction shows that the NDP is a good party?

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Speaker, it may have been the translation I was getting a little wrong. I will not repeat in English everything the hon. member said in French.

Here is the reality. The reality is that this is a good agreement for Canada. If the NDP continues to support this agreement, it is the right thing for that party to do. Unfortunately, its record on trade is not great. It has not supported free trade agreements in the past. However, if it changes its tack and supports this one, I will be thankful for that, absolutely. It is the proper thing to do.

More importantly, this agreement is exactly like all other agreements we have ever signed. It would improve the quality of life for Canadians, create jobs and opportunities, and immediately put more money in the pockets of hard-working Canadians. It also has investor state provisions the NDP is supporting that would allow companies to be on a level playing field with their competitors in Korea.

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

Mr. Speaker, I thank my colleague for his discussion about the fish industry in his own province of Nova Scotia.

We know that by removing tariffs and barriers, goods become available to consumers at a lower cost and people's purchasing power increases, as they have access to more imported goods. I wonder if the member could speak a bit about how the increased purchasing power of the people in Nova Scotia is going to translate into a higher standard of living for the people of Nova Scotia.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Speaker, it is extremely clear. Canada is a trading nation. Roughly 50% to 60% of business in Canada is export related. What the hon. member is asking about is trickle-down economics. Every time a wild blueberry producer in Nova Scotia is able to eliminate a 25% or 10% tariff, that is more dollars. That is real money.

Let us understand how insidious a tariff is. A tariff is on top of all the other costs. Producers have already covered their cost of production, have already paid wages, have already paid a lot of taxes on that and certainly all the remittances. Then, on top of that, there is a 10% tax called a tariff. That would be a 100% profit that would go back to a business and go into trickle-down economics in the form of wages and more goods, if producers were buying that product from another distributor. That money would go back into the economy and end up at the local service station, grocery store, and furniture store. It would be very good for the Canadian economy.

[Arnold Chan, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, I thank the parliamentary secretary for his contribution to the debate with respect to what this agreement would mean to the fishing industry.

My question to him is actually in respect of investment in South Korea, in particular as it deals with the highly integrated chaebol system in South Korea. I would like to get the parliamentary secretary's comments with respect to whether there would, in fact, be an appropriate balance between Canadian companies being able to invest in such a highly integrated industrial economy like South Korea's compared to South Korean firms that would be able to invest here in Canada.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Speaker, that is a very good question.

Up to this point, quite frankly, it has been difficult for Canadian firms to invest as much money in Korea as they would like to invest. We understand the protection in the South Korean economy.

However, for the first time, this levels the playing field. Canadian firms will have every opportunity to invest in South Korea, as South Koreans have to invest in Canada. That is really what these trade agreements are about. If we break them down to the lowest common denominator, there is rules-based trading that is fair for everyone.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, it is my pleasure to rise in the House today to speak to Bill C-41, an act to implement the free trade agreement between Canada and the Republic of Korea. Before I start, I would like to note that I will be splitting my time with the member for Trois-Rivières.

There are a few points I want to make on this bill. First, I would like to praise our critic in this area, the member for Vancouver Kingsway. This member is a lawyer with a very good reputation. He has spent a lot of time on this file making sure that he is using the utmost of his knowledge to understand and digest this deal and has explained it to the rest of us.

I feel very confident when the member says to us that we should be supporting this trade deal. The diligence he has put into this file gives me a lot of confidence that this is something we should do. I have been looking through the deal myself, and I concur with the critic's recommendation. I will be supporting this at second reading and look forward to this deal going ahead.

It is not just the local links with my neighbour from Vancouver that also gives me great confidence that this is a good idea. We also have a local MLA, Jane Shin, from Burnaby, who is the first Korean-Canadian MLA elected in British Columbia. I have spent many hours talking with her about how we could build closer links between our country and Korea.

Ms. Shin has been doing fantastic work in Burnaby. I look forward to hosting a round table with her and the member for Vancouver Kingsway on this issue in the near future.

My inclination on trade deals goes back to my Scottish roots, which make me hope for the best and plan for the worst. When I see trade deals, I like to think that perhaps we can support them. We start with the idea that we can support a trade deal, then we look at it in as much detail as we can to decide whether it is good for Canada. In fact, the NDP uses three important criteria to assess all trade agreements.

First, is the proposed partner one that respects democracy, human rights, adequate environmental and labour standards, and Canadian values in general? That is very important. I think most Canadians would agree that priority for trade agreements should be given to countries that share our values.

Second, are these deals of significant or strategic value to Canada? We do not want to sign frivolous deals. Is it just an announcement for the sake of an announcement, or is this really going to lead to economic growth in Canada?

Third, are the terms of the proposed agreement satisfactory?

Looking through this deal, and talking to the critic and local representatives, we think this free trade deal with the Republic of Korea passes all these tests.

I am happy to say that along with the deal we have signed with Jordan, this is another trade deal we can support, and I will be voting yes.

One of the reasons I am favour of this is that it is also different from some other deals, such as the FIPA with China. Where I think Canadians should draw a distinction is that the deal with Korea is reciprocal. That means that both countries will have more or less equal access to one another's markets. The terms of the China FIPA deal are not reciprocal, in my understanding.

It is important to go through the various clauses of these agreements to make sure that we are getting the absolute best deal we can.

I am especially excited about building better links with Korea, because in my capacity as the critic for science and technology, I have had the pleasure of meeting with a number of advisers to the President of Korea regarding their investment in science and technology.

The President of South Korea, Park Geun-hye, is an engineer by profession and has decided to continue her country's investment in science and technology in order to build their economy. I applaud this.

In my conversations with the advisers to the President of South Korea on investment in science and technology, a number of very interesting things came to light.

First, the President of Korea has made a commitment to ensure that 5% of their entire economy is reinvested in research and development.This is a massive amount of money, both from the private and public sector. It actually leads the world in the proportion of money invested in research and development.

It was explained to me that the reason Korea was so gung ho on science investment was that after the war Korea was essentially bombed flat with very few energy resources, so Koreans decided to invest as much as they could into innovation to grow their economy. We can see through the companies Korea is famous for, like Samsung, that this investment has paid off.

In conversations with presidential science advisers, they have said their goal is to make Korea the leader in the world in science and technology, not only in investing in applied sciences but also basic sciences. In addition to committing to investing 5% of the GDP into research and development, the President of Korea recently said that there would also be extra investment in basic sciences. That is in stark contrast to what happens here. Where Korea is aiming at 5% of GDP to be invested in research and development, Canada is only at about 1.7%, and that is a decline over the past few decades from about 2% when the Liberals were in power.

These trade deals will provide windows. We are often boastful in Canada, thinking we are the best in the world and there is not much we can learn from other countries. Closer ties are important to us because maybe here we will see the importance of investing in science and technology.

What is also extremely interesting with the Koreans is that they recognize the link between basic sciences and applied sciences. We cannot have companies building new types of widgets if we do not invest in the basic infrastructure of science and technology. That is exactly what the Koreans do and I hope we will learn from them.

The other thing the President of Korea has also said is that Korea will invest in stable funding for its science community. It is critical not to lurch from year to year with unstable investments, wondering if a lab is going to continue on. Rather, the President of Korea has said that Korea will invest in stable funding, not just increases but longer term.

The value of such agreements is that we get to see what other countries are doing, and Korea is leading us at this point in investment in science and technology.

The New Democrats have a number of proposals going forward that we would like to put in place which would complement this kind of Korean approach to science and technology. At a recent policy convention, we developed a national science strategy just like Korea has. More important, we passed a unanimous resolution that we move to match the percentage of GDP invested by public and private sectors in research and development as found in other global leading countries, such as the United States.

It is not just Canada that is trying to catch up to Korea in its investment in R and D. Korea invests 5% of its GDP into research and development and the United States is at 3%. We are at 1.7%. However, if the NDP became government, this resolution would build on these types of deals in order to increase Canada's investment in R and D.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, a number of years ago, I travelled to Seoul with the then foreign affairs minister. While I was there, we had a briefing from some of the people who were conducting the efforts to achieve this agreement. At the time, I asked them if there were provisions to allow for Canadian automobiles to have access to the country. The room went rather cold in a hurry. They had not reached that stage of the agreement.

Being the critic for international human rights, for me a concern is the standards of labour law, labour respect and human rights in that country. My belief is that it is more solid than any other agreement we have seen the government sign. In fact, Colombia's and some of the others were disgraceful. What is the member's opinion of this?

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I thank the member for the great work he does in and outside of the House. If we take post-war Korea, there is a dedication to rebuild the economy first and then a commitment from the late eighties onward to democratic reform and human rights. I think those are present in the labour force in Korea, the labour standards, and I would think they would be equally as strong in Korea as in Canada. Again, this is another reason why I support the agreement.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I want to follow up on my colleague's concerns about reciprocity in the auto sector. Coming from Ontario, the auto industry has been a huge player in the Ontario economy and we have heard a great deal of concern expressed about the lack of reciprocity when we deal with other markets, especially the emerging car markets.

My question for my hon. colleague is about the protections that have been negotiated to ensure we maintain a strong and vital car industry in Canada, as well as being able to trade into markets like Korea. I would like to hear my hon. colleague's concerns on this issue.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, again, I appreciate the great work my colleague does in his riding and in the House. We have some concerns about the impact on the auto industry, but where we should start is the lack of effort on the other side of the House to support our automakers. The industry has essentially been abandoned by the Conservatives. On this side of the House, we have done our best to protect it, and that is where things have to start.

Again, there are clauses built into the agreement to protect our auto industry still and we will monitor those as they go along. I share my friend's concerns, but wish the government would actually do more to encourage and boost the auto industry in Canada.

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

Mr. Speaker, I would like to ask my colleague if he agrees with me on that. I get the sense that the potential problems the auto industry could face have more to do with the Canadian government's lack of a strategy for the industry than with possible competition.

Korea has overcome absolutely extreme difficulties. Its economy was based on subcontracting: it manufactured low-end vehicles for competitors. However, it invested heavily in research and development and achieved a level of excellence that makes it competitive. Why do we not do the same thing here?

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I would like to read a quote from Jerry Chenkin, president and CEO of the Japanese Automobile Manufacturers Association of Canada, who said:

Free and open trade with priority markets in Asia, most notably Korea and Japan, is vital to Canada's national interest to be globally competitive, create jobs and increase prosperity...

We have consulted widely on the bill and support it because we feel it is a great deal for Canada and for all sectors of the economy.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I am tremendously pleased to rise this morning to express my point of view on the free trade agreement with South Korea. I very humbly but very fervently hope to dispel or shatter the false impression that the New Democratic Party is a party opposed to free trade agreements.

Unlike the other opposition party, the NDP understands that people think we should take the time to thoroughly analyze an agreement before deciding where we stand on it. That way, we can provide crystal clear explanations of why we support it, what its weak points are and what can be improved.

We take this thorough approach to studying these files and figuring out the real benefit to Canadians, whether they are workers or business people, because of the analytical ability and experience of our leader, the member for Outremont. He is very capable of sharing his analytical ability and his experience with the whole caucus, and I believe that makes us all better analysts.

Getting back to the free trade agreement with South Korea, one of the key principles around trade policy is the diversification of export markets. The slowdown in demand from the United States in 2008 made each and every one of us realize the risks involved in concentrating all of our exports and investments in just one market.

The vagaries of current economic conditions are pushing us to gradually reduce our trade dependence on the United States. Supporting the measures set out in Bill C-41 is therefore crucial. However, we must not forget to use our critical thinking skills when it comes to certain controversial measures in the bill, notably the investor-state dispute settlement mechanism.

It is important to bear in mind that NDP support for free trade agreements depends as much on democratic criteria as it does on criteria related to Canada's economic interests.

In fact, those criteria must be analyzed together when we assess the social and economic effectiveness of a free trade agreement. It would be completely absurd and counterproductive, for instance, to sacrifice respect for labour and environmental standards on the altar of economic effectiveness.

Accordingly, we support the implementation of this free trade agreement, especially given that South Korea represents a successful model, both politically and economically. Moving from a dictatorship to civilian rule, the Korean political system has proven its openness to civil society by allowing freedom of expression and promoting a multi-party system. The Korean political system rests on a vibrant trade union movement that is working to provide social protection for workers by guaranteeing labour standards comparable to ours here in Canada and offering relatively high wages.

The South Korean government's budget for 2014 includes a significant increase in spending on improving that country's social safety net and support for local communities. In economic terms, South Korea has a diverse industrial base, bolstered by high public spending on research and development, to the tune of 4% of GDP. Canada can learn something from the Koreans in that regard, since Canada is far less involved in research and development. A top-notch education system supports the efforts by the government to strengthen the industrial fabric.

These criteria are vitally important. Other countries offer attractive economic opportunities for Canada, but the absence of democracy, minimal social protection and transparency makes their political system completely unpredictable and therefore naturally detrimental to trade and investment. Accordingly, having South Korea as a preferred trade partner is a good choice on many levels.

South Korea is Canada's seventh-largest trade partner, with Canadian exports to South Korea worth $3.7 billion.

It is interesting to see that the Canadian and Korean sectors that will benefit from this free trade agreement are complementary markets rather than competing markets. There is a high demand for raw materials in South Korea, while Canada has a limited ability to export its energy resources. The free trade agreement will create a market for Canada's energy resources, thereby creating jobs in the energy sector in Canada. This is an important part of the NDP's analysis of each free trade agreement: looking at how it will improve the everyday lives of Canadians, no matter which province they live in.

What is more, with regard to Korea's social and environmental standards, Canada's economic sectors will not fall prey to social and fiscal dumping measures, and neither will the social safety net that our workforce enjoys.

Korea has also worked on improving its corporate governance. Some groups broke up or restructured in the wake of the Asian crisis in order to rebuild on a more solid financial and management foundation. Korea has an economic profile that is highly favourable to us. Rating agencies have assigned Korea an A2 risk rating. In other words, its political, social and economic situation is conducive to business and long-term investment.

Of course, Bill C-41 will allow us to win back the market shares lost to our American and European competitors, whose countries have already ratified free trade agreements with Korea. This has had a negative impact on the Canadian aerospace industry, whose exports to Korea have dropped by 80%.

I would also like to point out that free trade agreements rarely obtain the consensus and support of all of the economic sectors involved. I am thinking here of the Canadian automobile industry's concerns about this free trade agreement. In reality, it is up to the government to support the automobile industry's growth. The evolution of this industry strongly depends on the growth recorded in countries such as China and Korea. The same could be said for the forestry industry, which specifically affects Quebec and the riding and region that I have the pleasure of representing.

However, Bill C-41 provides for a dispute resolution mechanism that promotes the export of Canadian automobiles to Korea, and includes transitional safeguards if there is a sudden increase in imports affecting the Canadian automobile industry.

Finally, let us look at the unfortunate investor-state dispute settlement mechanism included in this bill. It is a regressive and undemocratic measure. Under this mechanism, private companies could take legal action against the Canadian government if the government were to pass legislation that would reduce the future profits of those private companies or investors.

With such a mechanism in place, private companies would have the ability to undermine Canadian health policies, social policies and financial regulation policies by suing for damages in courts outside Canada's jurisdiction. What is more, the investor-state case law shows that the courts more often find in favour of investors, calling into question the sovereignty of states over their own jurisdictions. An NDP government would repeal this provision, which is opposed by the main opposition party in South Korea. We have found some kindred spirits there.

The free trade agreement between Canada and Korea provides a momentous opportunity to diversify the Canadian economy and promote the creation of quality jobs in Canada. Some of the terms of the agreement are not what an NDP government would have negotiated. However, a cost-benefit analysis shows that the advantages outweigh the risks involved.

A critical examination of free trade agreements can be vital since such agreements can undermine local producers and entire sectors of the economy that were once thriving. Nevertheless, it will allow Canada to gain market shares in an area of the world where economic growth has not yet reached its full potential.

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

Mr. Speaker, I specifically thank my colleague for his support for this initiative.

Before I ask my question, I would just like to bring to the attention of members in the House a very interesting article in the fall edition of the official news magazine of the Canadian Snowbird Association. It is on fascinating South Korea, story and photos by Barb and Ron Kroll, talking about some of the tourist opportunities that are coming in South Korea. It looks like a fascinating place to visit. I have visited several countries in Asia, and I sincerely look forward to the opportunity to visit Korea if this article is any indication of what is available there.

One of the things we know about free trade is that countries can work on what is their comparative advantage. The province of Quebec has a real comparative advantage in the forestry industry, and I wonder if the member could talk about some of the advantages he sees for the forestry industry in Quebec with this Canada-Korea free trade agreement.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I would like to thank my colleague. If an all-party delegation one day tours Korea, I would be pleased to go.

Let us get back to her question, which has two parts. First, my colleague thanked me for supporting her government with respect to this free trade agreement. The NDP is proving that when members take the time to carefully analyze bills, it is possible to greatly decrease or even eliminate the partisan approach that hinders debate and the continued development of this country.

All parties in the House should follow the example set by the New Democratic Party in that regard. Just this past Saturday there was a very well-attended walk in support of forestry in the region I represent. In Shawinigan, plants in the forestry industry, especially pulp and paper plants, are still closing.

If we focused on research and development, for example in the area of new fibres or value-added wood products, my region would flourish with this free trade agreement. It would be a great support because there are large quantities of this resource in the area.

We have to develop exports of value-added products rather than raw materials.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Speaker, I would like to thank my colleague for his speech. While listening to him earlier, I was thinking a lot about Descartes's Discourse on Method, and I think we should reread the classics.

My colleague has clearly shown the reasoned approach taken by the NDP to free trade agreements, which is quite the opposite of the ideological approach of saying yes to everything, regardless of the consequences, as long as there is business to be done.

I am convinced that my colleague is a person of reason. Could he tell me a little more about the problem caused by extrajudicial tribunals in the conduct of government business? That is one of the NDP's concerns.