Debates of Sept. 30th, 2014

Canada-Korea Economic Growth and Prosperity Act

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, the member for Saanich—Gulf Islands mistakes my concerns, I am afraid, and I will take responsibility for that.

I stand in support of the agreement. It is qualitatively different from the deals that have come before, that the government has negotiated previously.

However, I think it is worthwhile in the context of having a debate on this issue in the House to raise the important questions that this bill raises. What is the broader economic policy context for this bill? Where is the policy or strategy that reflects the desire to ensure we can compete in terms of innovation, for example? Where is the policy and strategy that ensures all can participate in the economic benefits of this agreement?

What I got from the government is that simply dropping trade barriers seems to be enough for it, and what happens thereafter is somehow magic.

I support the freer trade agreement with South Korea, but it does raise the question for the auto sector and more broadly. What is the broad economic vision for this country? I would point to my neck of the woods, my neighbourhood, where we see the legacy of a strong industrial Canada that is now covered over with big-box stores and dollar stores, and where people are struggling to make a living.

I would ask the government what it is going to do about that.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, my question is relatively simple. Over the past few years, Canada has been losing industrial jobs and exporting its natural resources almost completely unprocessed. When the United States negotiates a trade agreement, it ensures that its industries are protected and it increases the value of its exports by processing them domestically. It provides those industries with investments, support and industrial policies, which we do not do here in Canada.

I would like to know if we could obtain this same economic agreement, supported by a policy of industrialization, which we currently do not have, since this would provide significant and real economic benefits.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, if we are to have a country where prosperity is increasing but is shared more fairly, then we need to have industrial policy to support the free trade agreements we are negotiating.

It is a particular interest and concern to me as the urban affairs critic, thinking about urban economies, because the government does not think about urban economies. What that indicates to me is that, in the absence of that thought, we are not going to grow an innovative economy. Urban economies are fundamentally the place where one grows an economy of innovation.

This is the very point. It is great to have a free trade deal of this nature, but as my colleague from Windsor has raised in his questions this afternoon, there is the issue of an auto strategy and other strategies that Korea has to support its free trade agenda. It has a green technology, green energy strategy that ensures Korea is going to be able to compete globally on those terms. It is 1 of 12 countries around the world that supports its auto industry with a national strategy.

We have none of these things. A trade agenda is great, and we will support dropping trade barriers where we believe it is of advantage to Canada's business and Canadian workers, but the very point of my speech here today is to urge the government to think about having industrial policy to support a trade agenda.

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

Mr. Speaker, the Canada–Korea free trade agreement is a landmark achievement that will result in mutual benefits and prosperity for both countries and lay the foundation to unlock the full potential of our political, economic, and security relations.

The most recent Speech from the Throne committed to expanding trade in the Asia–Pacific region to benefit hard-working Canadians and businesses, especially our crucial small and medium-sized enterprises and industries across the country. We are delivering on that commitment with this agreement.

The conclusion of the Canada–Korea free trade agreement negotiations was announced in Seoul by the Prime Minister and South Korean President Park Geun-Hye on March 11, 2014. During the announcement, both leaders demonstrated their strong commitment to raising the overall Canada–Korea partnership to a new level and to entering a new era in our countries' bilateral relations.

The Canada–Korea free trade agreement represents a significant achievement for Canada. It will provide exporters, investors, and service providers with strategic access to a key gateway to the wider Asia–Pacific region and will also provide a level playing field for them and their key foreign competitors from the U.S., the EU, Australia, and other countries that have concluded free trade agreements with South Korea.

In addition, the Canada–Korea free trade agreement is projected to boost Canada's GDP by $1.7 billion and increase Canada's exports to South Korea by over 30%. Canadian workers in sectors across every region of the country stand to benefit from increased access.

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

It is disappointing to note that during 13 long years in government, the Liberals completely neglected trade, completing only three free trade agreements. The Liberals took Canada virtually out of the game of trade negotiations, putting Canadian workers and businesses at severe risk of falling behind in this era of global markets. Thanks to our government, Canada has reached free trade agreements with an additional 38 countries.

While the Canada–Korea free trade agreement will provide a modern and stable foundation to grow our bilateral relations, it builds on our long history of political and economic co-operation.

Canada and the Republic of Korea established diplomatic relations in 1963. During the Korea War between 1950 and 1953, Canada contributed the third-largest contingent of troops to the United Nations command. Some 26,791 Canadian soldiers served in Korea, of whom 516 died.

As I said earlier today, my cousin was one of those people. Lance Corporal John Howard Fairman, who died on October 13, 1952, was the son of my aunt and uncle, Howard and Blanche Fairman. He grew up in Hastings, Ontario, and volunteered for the Royal Canadian Regiment.

After the Korean War armistice, 7,000 Canadian soldiers served as peacekeepers between 1953 and 1957.

Prior to the establishment of diplomatic bilateral relations, Canada participated in supervising South Korea's first elections in 1948, as part of the United Nations Temporary Commission on Korea. Currently Canada is the only state, other than the United Nations, with permanent military representation at the United Nations Command in Korea. Canada participates in the UNC military armistice commission that supervises the armistice.

As well, we are proud to have sent a Canadian delegation of veterans and government officials to South Korea for the 60th anniversary of the armistice on July 27, 2013.

This long-standing, strong, and meaningful relationship has been underlined by the recent leaders' visits. Indeed, The leaders have met twice this year. First, as I mentioned, the Prime Minister visited South Korea in March. In fact, the Prime Minister has visited South Korea on four occasions. The second meeting was just last week, when President Park made her first state visit to Ottawa. It was a great honour to welcome President Park and her delegation to Canada at that time. She was the first Korean president to visit Canada in 15 years.

The Governor General attended the inauguration ceremony of President Park in February 2013, accompanied by four Canadian parliamentary colleagues. This visit comprised part of the 50th anniversary of the establishment of diplomatic relations between Canada and South Korea. Both countries organized a series of activities and initiatives to further raise the profile of the relationship and deepen co-operation.

The Minister of Finance visited South Korea in October 2013 as Minister of Natural Resources, and the Minister of Fisheries and Oceans just recently travelled to South Korea to promote Canadian fish and seafood products.

The former Minister of Veterans Affairs, now the Minister of Public Safety, led a delegation of 35 Canadian veterans on a visit to South Korea in April 2013 as part of a revisit program for Korean war veterans. Some 74 Canadian Armed Forces personnel participated in the U.S.-Republic of Korea-United Nations Command military exercise in August 2014, forming the largest non-U.S. contingent from any of the other sending states.

I think members are beginning to see that Canada and South Korea are natural partners.

To further strengthen our already strong ties, Canada and South Korea have established a strategic partnership. Its purpose is to provide the opportunity to focus on areas affecting our bilateral relationship and to identify ways that we can work together regionally and globally on issues ranging from forestry to the Arctic to education to hosting the Olympic Games. This partnership will lay out a strategic direction for stronger relations in key areas of common interest, including energy and natural resources, science, technology and innovation, and Arctic research and development.

Our ties are not limited to bilateral relations. We recognize that we live in a changing and dynamic world. South Korea is in a region with many challenges. Canada and South Korea share similar regional views and objectives on a range of multilateral and global issues.

Our people-to-people ties are extensive and deep. Nearly 170,000 Canadians identify themselves as being of Korean origin. Over 23,000 Canadians are currently residing in South Korea, including about 3,200 language teachers, and 141,800 Korean tourists visited Canada in 2013. They constituted the eighth-largest source of tourists in Canada and spent almost $250 million in the Canadian economy.

Education ties are extensive and growing. South Korea is Canada's third-largest source of international students, with over 19,000 students. There are over 100 agreements among institutions in Canada and South Korea facilitating the exchange of students, faculty, staff, and curricula as well as providing joint research and degree programs.

South Korea is home to a Canadian studies community, including several university-based centres and the Korean Association for Canadian Studies. In Canada, the Korea Foundation supports several university research chairs and South Korean studies programs in universities across Canada.

When the Prime Minister visited South Korea in 2009, he was honoured to be the first Canadian leader to address the South Korean national assembly. At that time, he observed the following:

Canada and South Korea have been staunch allies in the defence of freedom and democracy.... We are not a warlike people, but when the cause has been just and necessary, Canadians have always answered the call. There is no doubt the cause of South Korean freedom was just and necessary. And, the truth of the ideals for which we fought has been revealed beyond a shadow of a doubt as this Republic has flourished, while the Communist North has floundered.

As I have described, Canada is a long-standing partner of Korea and its people. I believe that the Canada-Korea free agreement would contribute to this relationship and to both countries' mutual economic growth and prosperity.

I ask all hon. members to support this agreement, ensuring it enters into force as quickly as possible, as part of their support for Canada's broader collaborative and strategic partnership with South Korea.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I appreciate the speech by the hon. member.

I note that article 17.4 of this trade agreement states that “The parties”—that is, Korea and Canada—“shall strive to facilitate and promote trade and investment in environmental goods and services”.

Korea has been congratulated by the OECD on adopting and moving forward expeditiously on their green growth indicators. Korea has been at the forefront of green growth. It has a national strategy over 40 years and a five-year plan. It has committed 2% of the annual GDP to green growth, with investments geared toward infrastructure to boost the economy. It has passed a U.S. $30.7 billion stimulus package to support its green ambitions.

The question for the government is this: what will it do to implement its obligations under this treaty?

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Mr. Speaker, I would refer my hon. colleague to page 2 of the bill, where it talks about purpose. Right here it says:

The purpose of this act is to implement the Agreement, the objectives of which, as elaborated more specifically through its provisions, are to

And here one of the provisions explicitly is:

f) enhance and enforce environmental laws and regulations and strengthen cooperation between Canada and the Republic of Korea on governmental matters

We will continue to work on all of these areas with our partners to ensure that the environment is protected.

I spoke specifically in my speech about issues related to the Arctic. Canada has been taking very vigorous action on the Arctic, and we are going to share that with our Korean partners.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I have indicated in the past that the Liberal Party does support the trade agreement with South Korea. We see it as a step forward in overall international trade.

The member made reference to our current relationship, and we should be very boastful of our current relationship, whether it is foreign students or the economic ties that currently bring us together, not to mention out ties through immigration and the many contributions that people of Korean heritage bring to our communities, whether in downtown Toronto, out on the west coast, in my own lovable city of Winnipeg, or in all the regions of Canada.

That said, there are some legitimate concerns with regard to the agreement.

We see the benefits to the aerospace industry and we see the benefits to the pork industry. The specific question I have for the member is this: what sort of assurances can she provide to the automobile industry that the government and the agreement are being sensitive to the automobile industry, an industry we care deeply about?

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Mr. Speaker, as a member who represents the riding of Newmarket—Aurora, where the auto industry is thriving and we have secondary suppliers to the Big Three, I can say it is very important for the auto industry to stay strong.

I think we have had the discussion about how the tariffs would be reduced and how we would not have the kind of impact that some people are seemingly talking about as a threat to the auto industry.

I would like to address the hon. member's comments about the Korean people who have immigrated to Canada and the great cultural contributions they have made.

I have a rather large Korean community in my riding of Newmarket—Aurora. Substantially, they have a congregation that meets regularly in one of the churches in town, which tells me that the number of people in the area is large.

However, they have also bought farms in the area just to the west of me. They are providing produce, and they are excited about this agreement going forward because they see great opportunities for selling the produce they are growing here to Korea.

They are very excited about this opportunity. I thank them for the work they have done in our communities. I know they have invested in culture and in industry, and we thank them for what they have done for Canada.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, I am very pleased to rise today in the House to support Bill C-41.

Considering that it has taken approximately 10 years to get to this point, the NDP is proud of this agreement, which is the first free trade agreement that Canada has signed with an Asian economic partner. The terms of the agreement are largely satisfactory, with the exception of a few concerns that I will address later on.

Negotiations for this agreement officially began in 2005. The agreement, as it now stands, was signed on March 11, 2014, and was presented in the House on March 12, 2014. It was about time, because it had been nearly 11 years.

I would like to tell my colleagues about the criteria that the NDP uses to evaluate free trade agreements. To begin, the proposed partner must share basic Canadian values, such as respect for democracy and human rights, and it must have adequate environmental and labour standards. That goes without saying. When we negotiate a free trade agreement, we want to be sure that the other party shares the same values and applies the same industry standards that Canada does.

Then, we look at the proposed partner's economic situation. It must be of significant or strategic value to Canada. Finally, the terms of the agreement must be satisfactory. We believe that South Korea meets our criteria. Consequently, the NDP is supporting the bill. We have some reservations, but I will come back to them.

I would like to talk a bit about South Korea. Since the dictatorship collapsed about 30 years ago, the international community has watched the country transition to a modern democracy with high standards with respect to human rights, labour rights and environmental protection.

It is the only country in Asia to have been ranked 15th on the human development index. That accomplishment is due in part to the numerous social programs implemented by the government, the prevalence of the rule of law, low levels of corruption and access to quality education.

South Korea also launched an ambitious green strategy to improve its energy efficiency. It is abundantly clear that the country has great respect for the environment and that the government is making serious commitments in that regard. South Korea is a candidate that shares Canadian values around human rights, democracy and the environment. That is an extremely important aspect of an intelligent and balanced approach to a free trade agreement.

In addition, South Korea is of significant strategic value to Canada, which has been at a disadvantage ever since the United States and the European Union both signed free trade agreements with South Korea. That created an economic imbalance and affected a number of industries in Canada.

Preliminary estimates show that the agreement would eliminate almost 98% of tariffs for both parties. Also, Canadian exports to South Korea are expected to rise by 32%, which is worth about $1.7 billion. Let us not forget that South Korea can serve as a gateway to other Asian markets because of its position in the Asian supply chain.

Complementary aspects of the two economies redefine the success of the agreement because Canada and South Korea will not necessarily be in direct competition in their shared markets.

However, Canada would do well to support our automotive industry and create programs to encourage the Korean automotive industry to come set up shop here. I will come back to this later.

The biggest winners among Canadian industries are the heavy industry, agriculture—our pork and beef farmers have suffered greatly from the lack of agreement for many years—the forestry industry, the aerospace industry and the fisheries. A number of associations have expressed support for this free trade agreement.

I will start with the agricultural sector, which is vital to our economy. It accounts for about 8% of Canada's overall economy and provides nearly 2.1 million jobs. The two agreements signed by the United States and the European Union unfortunately affected our economic balance in the agricultural sector. For example, the Canadian beef industry saw its exports to South Korea drop from $96 million in 2011 to just $8 million in 2013. The same was true for pork exports. These two industries suffered a lot because we did not have a free trade agreement. The ratification of the free trade agreement with South Korea is an opportunity to turn things around for these disadvantaged industries, by eliminating 86.8% of the tariffs on those industries.

In the aerospace, seafood, forestry and food sectors, the situation is very similar. These sectors will significantly benefit due to the abolishment of export tariffs and increased market share in South Korea and the Asia-Pacific region in general. Jayson Myers, president and CEO of the Canadian Manufacturers & Exporters, says “Asia’s rich markets are the next frontier for Canada” in our desire to abolish all kinds of obstacles to ensure the expansion of trade investments.

While the agreement is superior to the one with China and the EU, we expressed a few concerns about this FTA. As I mentioned previously in my speech, there are some issues for the auto industry.

First of all, the NDP is calling on the government to do more to support the auto industry in Canada and is eager to propose solid, effective policy measures to strengthen the Canadian auto sector. The government can and should encourage Korean auto production in Canada and assist Canadian automakers to penetrate the Korean market.

The government continues to fail the auto sector, and I think it is time for it to take a more comprehensive approach. Our auto sector has suffered continuously from the lack of propositions by the government. The most positive features of the Korean FTA are the rules of origin provisions that favour Canadian-U.S. integrated products and the accelerated dispute resolution mechanism that allows for the monitoring of non-tariff barriers.

At the same time, our party has expressed some legitimate concerns about the Korea FTA regarding the Canadian auto sector. Unifor and Ford Canada's opposition is sensible as the FTA Korean imports will negatively affect domestic auto sales. As well, Canadian auto exports will suffer from Korean non-tariff barriers. Additionally, Korean producers seem to penetrate the domestic market through other NAFTA countries. For example, 50% of Korean auto products enter the Canadian market tariff free through the U.S.

In closing, I would like to talk about the many potential problems with the investor dispute settlement provisions. As we know, the German government said that it was not necessarily ready to ratify the Canada-European Union free trade agreement because Canada had insisted on including investor-state dispute resolution provisions. We know what kind of adverse effect this type of mechanism can have on the sovereignty of governments and on their ability to adopt environmental or economic regulations that favour industry in Canada.

The NDP is asking that free trade agreements not include this type of mechanism. As I already said, this could have an adverse effect on the sovereignty of governments.

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

Mr. Speaker, I wanted to pick up on a couple of points that my colleague made near the end of her speech, pointing out that 50% of Korean cars currently enter Canada duty free from the U.S. under NAFTA and that over 85% of Canadian production is exported. We know that is the current situation, but since the Korea-U.S. free trade deal was signed, U.S. auto exports to Korea have more than doubled from $340 million in 2011 to over $800 million in 2013. Since the Korea-EU agreement was signed, exports to Korea have doubled from $2 billion in 2010 to $4 billion in 2013.

Considering the facts that currently 50% of Korean cars can enter Canada through the NAFTA already, if we remove these tariffs would we not expect to find similar results to the U.S. and the EU after they signed their Korea free trade agreements, with auto exports actually doubling? Also, Ford set an annual sales record last year in Korea. From 2012-13, Ford was the fastest growing brand being sold in Korea. The concerns that the Ford Motor Company had and the concerns about possibly reducing numbers, I think these numbers would indicate the opposite.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, I thank my colleague for raising the point I wanted to make in the House.

The government failed to help the auto industry in Canada. We have continuously been disadvantaged through the government's inability to strengthen our industry.

The government should be adopting policies to help stimulate Canada's automotive sector and encourage other countries to invest in Canada.

The point I was trying to make was not about whether the free trade agreement was going to support the industry or not. I was talking about the government's constant lack of leadership when it comes to stimulating our own economy.

Signing a free trade agreement is not necessarily the equivalent of waving a magic wand and erasing everything the industry has gone through since the government refused to adopt policies that were appropriate for the situation.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for her speech on the bill.

I would like to ask her why it would be important for the government and the other opposition parties to adopt an approach as balanced as ours. As we know, the Conservative and Liberal approaches are not as balanced.

Sometimes, free trade agreements are signed with somewhat questionable countries. Other parties approve some free trade agreements without knowing all the details.

Why is it important to have a balanced approach and to read all the details of an agreement before voting on it? How important is this for Canada's economy?

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, when we negotiate a contract or a free trade agreement, we must ensure that the people with whom we are negotiating are on an equal footing. We want to help our industries, but not at any cost.

The government negotiated dozens of free trade agreements that contained provisions to encourage economies to respect workers' rights. The government signs the free trade agreement and then later ensures, for example, that the countries' values are in line with Canada's values.

Personally, I believe that when we negotiate a contract or a free trade agreement, we must ensure that the people with whom we negotiate are on an equal footing. This applies to any situation. I am not going to tell someone that I am going to sign his contract and that I will check later whether or not he complies with the terms of the contract. First, we must ensure that the person signing the free trade agreement will and already does respect Canadian values concerning the environment and workers' rights, for example. I believe that is the least we can do. That is a realistic approach. It is a balanced approach, and that is precisely why the NDP is calling on the government to take that kind of approach.

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

Mr. Speaker, I am pleased, as this debate continues on the Canada-Korea free trade agreement, particularly on Bill C-41, which would bring the treaty into effect, that as the leader of the Green Party of Canada, I am able to put more fully on the record the position I have stated so far through questions and comments. The Green Party will not be supporting this treaty. I will explain the fundamental reason and then will go into some of the details.

Fundamentally, the Green Party of Canada will never support an agreement that includes an investor state provision. We believe investor state provisions are, by definition, anti-democratic. By definition, the notion that we should allow a corporation or investor from another country to have superior rights to Canadian companies in response to Canadian laws, whether passed at municipal, provincial, or federal levels, is offensive. The first of these was chapter 11 of NAFTA.

I will go into more detail later as to why we oppose investor state agreements and the particularities of the Canada-Korea agreement. I also want to back up and say that in the Canada-Korea treaty, the Green Party believes we missed our opportunity to ensure that we had a more balanced deal.

Let me say this about South Korea: what a tremendous economy it has built. In the wake of the collapse brought about by currency speculation, the trading in currencies that created a meltdown of what were then described as the Asian tigers, Korea, through a lot of state-led economic policy, has built an economy that is championing renewable energy, as some of my colleagues in the NDP have mentioned, and championing clean tech. There is a lot to be admired in what South Korea is doing. Therefore, the comments I am making about this trade deal are not in any way to suggest that South Korea is not a really impressive democracy doing a lot with technology.

The difficulty the Green Party has is with the way this trade treaty is going to go forward. We agree with the concerns of the auto sector in Canada, both the CEO of Ford and Unifor, representing the workers, that we will lock in our trade imbalances and not reduce them.

I know some of my colleagues have mentioned Unifor. Let me read into the record the views of the CEO of Ford Motor Company of Canada, Dianne Craig, who said, in response to this treaty, “...South Korea will remain one of the most closed automotive markets in the world” under the new deal. She went on to say that the trade agreements the U.S. and the European Union have executed failed to reverse their negative trade flows, but those treaties were more protective of their domestic car markets than Canada's treaty with Korea would be.

I am again quoting the CEO of Ford Motor Company of Canada: “No Canadian manufacturer can compete with a market controlled by non-tariff barriers and currency manipulation”. Of course, we know that this agreement does not deal with those barriers to Canadians' access to the automotive market.

It is quite true that we have a lopsided relationship in trade with Korea. In 2012, we were exporting $3.7 billion worth of exports to Korea, and $3.7 billion is an impressive number. However, we were importing $6.4 billion in imports from Korea. The story of what constituted that $3.7 billion worth of exports and $6.4 billion worth of imports is worth touching upon.

Canada has largely been exporting raw resources to Korea. Under this deal, the commodities touted in the materials that have accompanied the deal have talked about what this would do to improve agricultural exports and raw commodity exports, whereas when we look at what we have been importing from Korea, it has been high-value manufactured imports.

Let us look at what Canada has been exporting to Korea. I will quote Jim Stanford, who is a very respected economist who works with Unifor. He put it this way:

We export mostly raw material to Korea, and we import sophisticated high technology products from Korea.

Continuing the quote from Jim Stanford, he said:

Canada's top four exports to Korea last year were coal, copper, aluminum and wood pulp. Our top four imports were motor vehicles, electronic circuits, auto parts and smartphones.

There is nothing in this trade deal that is going to change the characteristics of what we are importing and what we are exporting. I referenced the history of what we have seen with the quote from the CEO of Ford Motor Company of Canada. She certainly mentioned the experience of the U.S. and the EU. Concluding trade deals with Korea did not change the gap that existed in trade flows. In other words, having executed deals like this, and ones that were more protective of their auto markets, they still saw the trade deficit with Korea expand.

There is something wrong. This is a larger conversation I would like to have someday in the House. The Green Party believes that Canada is losing out in productivity and in R and D by allowing our exports to be skewed over the last number of years from 60% value-added exports to, currently, 60% raw material exports. Being a compliant resource economy for other countries around the world is not in the best interest of our economy and certainly is not in the interest of rebuilding our manufacturing sector.

I turn quickly to the issue of investor state agreements. By definition, they are perverse, but it is interesting how different they are becoming, depending on what country we have negotiated with. It is at least important that on the Canada-Korea agreement we are being given the opportunity to vote on something. We are having a full debate in the House of Commons. On the most devastating, damaging agreement yet negotiated by any government in Canada, the Canada-China investment treaty, the so-called FIPA, we did not have debate. We did not have votes. We did not have a bill go to committee. That was because it was not a trade deal; it was an investment deal. It was a stand-alone treaty. It gives, because it has now been ratified, the People's Republic of China the ability to bring arbitration cases against Canada for changes in our domestic legislation, whether municipally, provincially, or federally. That treaty includes no transparency whatsoever and binds us for 31 years.

At the far end of the extreme of trade agreements with an investment provision, which showed that the Government of Canada was dealing with a negotiator from another party that wanted to reduce the pernicious nature of investor state agreements, we have the new text of CETA with the EU, the comprehensive economic trade agreement. The Green Party will not be supporting CETA. However, when I read through the investor state provisions, what a revelation. It is quite different. It is night and day in terms of transparency. If the CETA goes through, for arbitration cases brought by investors from the EU against Canada or by Canadian investors against the EU, the arbitrations themselves will be open to the public. The most we can expect out of any other trade agreement, such as, in this case, the Canada-Korea free trade agreement, is that we will get public notice of the fact that these proceedings are happening at all.

That is also what occurs under most of the intermediary bilateral investment treaties that were negotiated after chapter 11 of NAFTA. Chapter 11 of NAFTA, like the Canada-China investment treaty, has no transparency whatsoever. The CETA is at the far end of the spectrum. It says that they will open up these arbitrations to the public and let people with an interest actually present evidence and participate. It is almost getting like a court as opposed to a private arbitration in a hotel room somewhere.

In the case of the Canada-Korea free trade agreement, the investor state provisions fall in the mid-range. They are not as pernicious, nor do they lock us in for 31 years, as the Canada-China agreement does. Neither are they bending over backwards to try to win over people who oppose investor state agreements. Clearly, that is the case in the European Union. They stand in opposition to CETA because of investor state agreements, at least in Germany. However, the Canada-Korea free trade agreement still includes that measures adopted by a party include municipal, provincial, federal, and local governments and non-government bodies acting with authority from local parties. In other words, we are opening up the gates once again to investor state arbitration suits that could cost us billions, this time from Korea.

Both of us in the Green Party will be voting against this treaty. I urge other members of this House who are concerned about the impacts of this treaty to join us, no matter what their party instructions are.

Bill C-13--Notice of Time Allocation

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I want to advise the House that an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) concerning the proceedings at report stage and third reading of Bill C-13, An Act to amend the Criminal Code, the Canada Evidence Act, the Competition Act and the Mutual Legal Assistance in Criminal Matters Act.

Under the provisions of Standing Order 78(3), I give notice that a minister of the crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at those stages.

[The Acting Speaker, Conservative, Bruce Stanton]

I am sure the House appreciates the notice by the hon. government House leader.

The House resumed consideration of the motion that Bill C-41, An Act to implement the Free Trade Agreement between Canada and the Republic of Korea, be read the second time and referred to a committee.

Canada-Korea Economic Growth and Prosperity Act

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I wanted to ask my hon. colleague from the Green Party about her party's very strong opposition to investor state dispute resolution provisions.

I talked to some experts in my own riding of Kingston and the Islands from Queen's University, lawyers who specialize in dealing with some of these disputes and in writing treaties, to try to understand this issue. They seemed to uniformly emphasize that Canadian businesses need that protection in other countries, and that on the whole, Canada probably gains from these agreements.

The other thing they emphasized is that if we look at all the damages Canada has had to pay so far, if we take out the AbitibiBowater settlement, which reflects the value of assets that were seized, expropriated, by the Newfoundland and Labrador government, and add them up, it comes to only about $20 million so far. We have to put that in the context of $600 billion worth of foreign investment in Canada. It is one thirty-thousandth. If we put that in context, what I have gotten from the experts I talked to in Kingston is that it is very small compared to the amount of investment in Canada.

I want to ask my hon. colleague if she could comment on that and explain her party's opposition.

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

Mr. Speaker, the Green Party's strong opposition is drawn from empirical data and extensive experience, including advice from international lawyers, particularly Canada's leading arbitration lawyer in this area, and the only one who is not personally benefiting from participating in these investor state disputes, Prof. Gus Van Harten, at Osgoode Hall Law School.

His view is buttressed by an EU think tank study called “Profiting from Injustice”, which examines the hundreds of investor state agreement disputes around the world and finds a very distinct pattern. The smaller economic power almost invariably loses, whether it is an investor corporation from the smaller power versus a larger government or, reversing it, a larger government investor suing a smaller country.

The reality is that no U.S. company suing in the U.S. under Chapter 11 of NAFTA has ever won, and the U.S. private sector companies suing Canada have almost always won.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I want to specifically hone in on one aspect of the speech by the member for Saanich—Gulf Islands with respect to the auto sector and put some context around where we are right now. I look to her for some recommendations she might support.

Right now there is a 6% trade barrier Canada raises against Korean automakers coming into the Canadian market. Korea, reciprocally, holds an 8% barrier.

Korean automakers have been building in the U.S. and in Mexico, and that is the way they have been entering the Canadian market and avoiding that trade barrier. They are not building in Canada right now.

I would suggest that this would also be cited as a current problem in our trading relationship. What types of steps would the member be encouraging a more progressive Canadian government to take to encourage some of that auto manufacturing to take place in the Canadian context, as it is taking place in the U.S. and on the Mexican side of the border, thereby avoiding the trade barrier we currently impose, prior to the agreement being ratified?

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

Mr. Speaker, I think we need to have trade deals that have targeted measures that would protect and allow our sectors to expand and allow us to have Korean vehicles made in Canada, as my hon. colleague suggests. Therefore, tariff reduction should be tied to measurable targets in reducing bilateral trade imbalances in strategic sectors, such as in the automobile sector.

It would certainly be helpful in creating a tariff-free zone if we had specific measures to require that larger Korean firms start building in Canada. We should be able to retain the ability, as the Korean government has retained its ability to intervene in its markets, to create the kinds of interventions that moderate the damage of trade imbalances. This agreement would not do it but as I mentioned even the CEO of Ford Motor Company thought we should be dealing with it. The trade agreement should include provisions regarding currency misalignment.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I have the honour and the pleasure to rise to make a short speech about Bill C-41, An Act to implement the Free Trade Agreement between Canada and the Republic of Korea. It is a pleasure for me because this proves that the official opposition, the NDP, examines the context of each bill introduced in the House. It studies bills not based on its ideology, but on the facts, and with a view to determining the merits of each free trade agreement.

We have some concerns about this agreement, but there are also benefits for the Canadian economy.

It has been said that the problem with rigid ideology is that we often get the answer before we ask the question.

We have often seen with trade deals by the Conservatives and often their strange bedfellows, the Liberals, that they say yes before reading the text. They say yes before trying to understand what the impacts are going to be. The NDP has taken a very transparent and clear approach to the trade deals as they have been presented to us over the previous years in the House of Commons. Applying a consistent and transparent approach to trade negotiations allows Canadians to judge us on our approach to those trade negotiations. It also allows the New Democrats to apply a consistent measure to the trade deals, and judge each one in context as it comes forward.

What would some of those criteria be? Certainly, one would be the strategic diversification of the Canadian trading relationships we have with the world. Korea obviously meets this test. It is the seventh largest economy and the fourth largest in Asia. It is a key entrant into the Asian market, with which we presently have no trade deals.

My hon. colleague preceding me mentioned an agreement that the New Democrats do not support, which is one that was negotiated, signed and ratified in secret with the Chinese government. That is the so-called FIPA, or the foreign investment promotion and protection agreement. We do not support it for obvious reasons, which I could get into but I want to stay focused right now on the Korean deal that is before us.

Another key condition for us as New Democrats in looking at any deal is an element of reciprocity. It is no good for Canada, often as a more primary resource economy and an economy that is smaller when dealing with the United States, China and other potentially larger economies, to not embed reciprocity into the very DNA of the negotiations. That has been accomplished in this deal and it gives us some comfort.

Are we trading with another nation that has at its heart democratic rights and institutions so that they can have a free and informed debate on their side, not only of the trade deal but of the relationship going ahead? That is clearly a test that has been met by the Republic of Korea, which has a strong and long history of democracy. It holds high standards not only for democracy and human rights, but for workers' rights and the environment. These are tests that are important to us as New Democrats.

There has been a number of trade deals signed by the government with foreign regimes that cannot make that claim. The reason that it is so important is that when we make a trade deal or relationship, we assume that all ships will rise in the harbour, as Reagan used to say. That depends on whether our trading partner is willing or able to enforce a higher standard for environmental protection, for workers' rights and for democracy.

If we are dealing with a regime, as the Conservative government has been only too willing to do, that is unwilling, unable or unlikely to do that, what is the positive force that we are looking for in trade in the world? If what is happening at the end of the day is that a regime that is abusive of human rights and does not uphold high standards for workers and the environment is allowed to continue, it gets to wrap itself in the good name of Canada. It can say, “We must be a good country because Canada has agreed to a trade deal with us”. The Conservative government has done that too often.

Allow me a moment to contrast this, as I alluded to earlier, with the Conservative and, I would say, Liberal approach to the foreign investment protection agreement with China. It was negotiated in secret and then signed in Russia. It was held for two years before it was ratified by the government, with no debate and no transparency whatsoever. It is a deal that locks Canada in for 31 years, even after we decide that it is no longer beneficial to us.

Take a moment to consider that. What country in its right mind would sign an investor protection agreement with 31 years before it is able to withdraw from such an agreement?

Questions of reciprocity need to be taken right off the table. I can recall a brief blip in the Prime Minister's logic that was exposed here in the House when the NDP was asking questions about the reciprocity, the reciprocal nature of such a deal as the China FIPA deal. The Prime Minister said Canadian companies will be protected by the rule of law in China, and then he had to pause because such an assurance is obviously ridiculous on its surface and in its intent. We have seen what the challenges have been to many foreign companies attempting to operate in China, rules around intellectual property agreements, rules around just basic protection for those seeking to do business in China. It is farcical for the Prime Minister of Canada to suggest that there would be any such protection.

FIPA was entered into in this mix of secrecy and the notion of “just trust us” from the Conservative Party, which no one does when it comes to things like this. With such a large trading partner only growing in influence and power, and with serious concerns about human rights abuses, about impacts on the environment, about democratic institutions that are not yet robust in China, we were able to say with a great deal of confidence that Canadians were overly wary of this. Chinese Canadians, recent immigrants to this country from China were also wary of such a deal. Any government that lacks the confidence to bring a trade agreement of any kind to the floor of the House of Commons speaks volumes about what is behind that trade deal.

In any trade deal, and this is true regardless of the nature of the trade deal, regardless of the trading partner, there are certain aspects of our economy that will greatly benefit, others that will benefit less, and others that may be hurt.

We are asking important questions about the agreement with Europe right now, because the government has refused to give us details on support to the dairy sector, for example. That sector will obviously be harmed by what is happening with the European trade deal. There are potential impacts on pharmaceutical medications and costs to Canadians and to the provinces, which are already reeling from a $36 billion cut to transfers in health payments from the federal government. Canadians want to know if their prescription medications are going to get more expensive under the trade deal with Europe, and the Conservative government has offered us absolutely nothing. This goes back to the Conservatives saying, “Trust us, do not worry”.

I mentioned the auto sector earlier in a question to my friend from Saanich—Gulf Islands. Korea is a growing and significant power in auto manufacturing.

Let me summarize the context that we are faced with. Canada levies a 6% barrier on autos coming in from Korea. Korea inversely puts an 8% barrier on Canadian imports with a number of other non-tariff trade imbalances. Korean manufacturers have been building cars in the United States and Mexico. Obviously, a car manufactured in those places will enter Canada trade-barrier free, and they have been for a number of years. When the U.S. signed its trade deal just two years ago with Korea, the gap widened but the overall volume of cars going to Korea and cars coming from Korea into the U.S. went up.

Canada has been lagging behind. We are concerned because the government has been slow to move in negotiations with Korea and our auto manufacturing sector has been losing market share. Market share has also been lost across agriculture, wood products and a number of other things that have raised concerns for many of us.

Let us take the global context for a moment. Foreign direct investment in the auto manufacturing sector alone approached nearly $18 billion last year. Do members know how much foreign direct investment came into Canada? The answer is zero. That should be a concern to all Canadians whatever their political stripe and their influence. Canada may be and in fact is slipping behind our competitors when it comes to investing, particularly in the new technology, the advanced stage cars that are coming on line that take us away from the carbon economy. Canada has fallen too far behind in that.

More support needs to be given to build that next generation of automobile. If $18 billion globally has gone into the advanced auto sector and manufacturing and Canada has received nothing, this should be cause for alarm. However, we see in this trade deal that even though we are opening up this new segment to Korea, there is no support for the Canadian auto sector whatsoever. This raises concerns for us. The concerns raised by Unifor, Ford and others are important for us to consider.

The New Democrats will support this deal with some reservations on the investor state protection agreement in particular. Our Korean counterparts in the opposition government right now are also raising concerns. A future New Democratic government would revisit those aspects of the bill, take out the most odious aspects. Hopefully a Korean opposition would see likewise the benefits of having a good trade deal for Canada and Korea without some of the more egregious parts of the act that we have concerns with today.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member concluded his remarks by saying that the New Democrats would reopen the agreement. I acknowledge the importance of our automobile industry in Ontario. The member had the opportunity to highlight his concerns. Would he like to add anything further to it given we have to be brief?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, yes, highlighting the importance of the Canadian auto manufacturing sector is incredibly important.

[The Acting Speaker, Conservative, Bruce Stanton]

Is the House ready for the question?