Mr. Speaker, I always enjoy getting involved in debates concerning trade and concerning the budget, because one of the things about these debates is that it enables us as parliamentarians to speak to our constituents about broader principles. I do not currently sit on the international trade committee. I have in the past and really enjoyed it. I do not quite have the detailed knowledge of this particular agreement that the members of the committee have, but trade is an important subject for Canada.
We can talk about the broader economic impacts, the principles, the understandings, because our debate in this place is not just to convince each other of the merits of this particular legislation but also to explain and educate Canadians on why the principles of free trade work and why we support this in a broader sense. Interestingly enough, it appears all three major parties will be backing the bill. One of my degrees being in economics, I very much enjoy talking about these broad principles in trade.
One of the things people instinctively understand in their individual lives is that trade is good. When I go to a grocery store, I trade. I may trade for a bag of chips. I may trade for a carton of milk. However, I always trade something. At every store I shop at, whether it is where I come from in Saskatoon or in Ottawa, I end up with a trade deficit with them, so to some of the hon. members who are implying that all trade deficits are bad, they need to think about that. For most people, when they buy something, a trade deficit is actually a good thing.
My salary is the one place where I have the equivalent of a trade surplus. My wife of course has the same thing. We instinctively understand that trade between individuals and each other, and individuals and businesses is good, but sometimes we do not always understand that the exact same principle goes from country to country, from nation to nation. Let us face it, what is a country? It is a collection of peoples that for some reason have been drawn together. Perhaps they have a common history, a civic identity, such as we have here in Canada. Perhaps they have a common ethnic identity, as do some countries in the world. However, whatever it is, a group of individuals have gotten together. It is not just trade among those individuals, but individuals across boundaries from one nation to another. Therefore, the principles fundamentally apply. It is just that with the complexity, the distance and everything, we begin to argue different principles, but it is really the same.
Free trade from an economic perspective is always in everyone's economic interest. There may be political interests. There may be other reasons why one may not want to trade with a particular country. We have trade sanctions against various regimes not because we think that benefits us economically. In fact we even acknowledge it hurts us economically. We do it because we want to make a broader political point and we are prepared to take whatever pain to advance a broader cause.
That is why it gives me pleasure today to talk about the agreement we have with the Republic of Korea, commonly known as South Korea.
Having read a little, not too much, of Asian history, I find it fascinating how the people of the Republic of Korea, South Korea, have been able to advance and build their country over the last decades in particular, starting after World War II where it had essentially been run as a Japanese colony and then of course came the absolutely disastrous, brutal Korean War that affects them to this day. They were at that point, according to one reading I had, the poorest or next-to-poorest nation in the entire world. Today, by some estimates they are the 30th wealthiest country in the world and the 13th largest economy. It is a country approaching 50 million people.
For those of you who have not had the pleasure of travelling there, go there. It is a vibrant, wonderful country. I have been there a couple of times. My wife Gerelt worked there in the Korean parliament, prior to her immigration to Canada. She just loves it and adores the people there and has actually come to really love the food. I am a Saskatchewan farm boy. It was a little different, but it is there.
Korea has become an absolutely dynamic leader in the world economy. That is one reason why we as Canadians need to get involved and trade with it more. As has been noted, in 2011 we had $5.1 billion per year in exports to Korea and our growth and exports over the previous five years had grown by a compounded rate of about 9.2% per year. Now, looking through our numbers here we are down to $3.7 billion in the final year that we have statistics for. That is a drop in trade.
The economy is growing, et cetera. Why did we have a drop in trade? One of the particular and major reasons we had a drop in trade with South Korea, which we all know, is that some of our competitors got involved with major trade agreements, in particular the United States of America. The Europeans are also finishing their trade agreement with South Korea.
That brings me to one of the absolutely major reasons we need to get involved in this trade agreement. It would protect markets we have built up and are now losing because of competitors that have come after us.
For the various reasons that have been discussed, we were not able to quite get the agreement as soon as we wanted. We do not have quite the same leverage. We do not have the geopolitical strength in that area the United States does. However, we need to catch up. We need to get involved with South Korea and follow up on that trade agreement.
This trade agreement is also important for diversification. One of the ongoing trade issues we have with the United States is country of origin labelling. Through the back door, the United States is stopping the export of cattle and various other products into its market.
It is a great benefit for us to be involved with the United States of America. However, dealing with and making trade agreements, as we are with Europe, and as we are now debating, with Korea helps us to diversify our markets for all of our goods. When there is a country that acts with a backward policy, as the United States government has done with its country of origin labelling, we will have other options, other places to go to sell our products, in this case, agriculture. That is why it is absolutely important and vital that we continue to engage in treaties, not just this one but all others.
I would be remiss if I did not bring up this point, because I often see in the House that we debate and gladly and quite accurately talk about all the trade benefits that trade agreements have for our exporters. However, let us be blunt. There are great benefits for our consumers. If I may, I will throw in a quote, again, from one of my favourite economists, Mr. Milton Friedman. He said:
The great danger to the consumer is monopoly—whether private or governmental. His most effective protection is free competition at home and free trade throughout the world.
This is a benefit that is often overlooked. When we reduce tariffs on South Korean imports to Canada, that allows our consumers to buy the exact same goods at a lower price and have more money to spend. Our importers that use Korean products then have lower costs for their imports. It makes them more competitive. One of the things we need to always remember and celebrate, actually, is the benefit to consumers from this agreement.
Finally, coming from Saskatchewan, Canada's agriculture heartland, I have to note some of the benefits for the agriculture industry.
In Saskatchewan, it does not matter where one is, Saskatoon or Regina, big towns or small, everyone benefits from a growing agriculture economy. My riding in particular, with one-third being a rural area and with the College of Agriculture at the University of Saskatchewan, benefits fairly directly.
Let me, for the record, put in a few of the cuts to tariffs South Korea would make that would help us sell more and challenge our rivals in the United States and Australia
The current rate for rye is 108.7%. That would be reduced.
Flaxseed may be only 3%. The current rate for pulses is up to 607.5%. Coming from a riding where pulses are very important and have helped us diversify from wheat, that is very important.
Animal feed, pork, flaxseed, golden roasted flaxseed, mustard seed, and of course, wheat are all products Saskatchewan grows and exports. This agreement would add to the $149.5 million, from 2010 to 2012, in agriculture products we exported to South Korea.
I look forward to questions on this important trade deal for all Canadians.