International Trade committee  We'd make it up by no longer shipping many of the products for which we used to be close competitors with the U.S. So, we've kind of given up on selling bellies and things like that. We're still selling some of these offcuts, like bones and so on, but the 15% disadvantage has really knocked us out.

International Trade committee  If we can get this in place for January 1, we would be disadvantaged by 15%, and we would stay there for two more years. Then we would see that eliminated over the next three years. Our disadvantage would go from 15%, then to 10%, then to 5%, and then to zero after five years.

International Trade committee  We look to some work that our U.S. counterparts have done on the importance to them of their free trade agreement with South Korea. They have measured it at $10 a hog. We've always found that to be quite staggering. But even if it's half of that, which I think is quite likely, If you've got 25 million hogs being produced in Canada for processing you're talking about $125 million a year.

International Trade committee  That is true. In fact, a big export is bones for Korean soup, and other parts of their foods market. We also have probably the best market in the world for the bellies. That's what we take our side bacon from. Korea uses bellies and that is its most valuable cut. If you lose that market then you're losing what is the best market for that cut in the world.

International Trade committee  And the meat processors, very much, and the exporters, and the entire industry.

International Trade committee  2011 was an exceptional year for total exports due to a foot-and-mouth disease outbreak in South Korea in late 2010. We certainly wouldn't attribute the entire decline to that, but this year, for example, where our exports are down almost 20% and Korean imports are up 13% to 15%, I think the only thing that would explain that would be the absence of a free trade agreement for Canada, and its competitors having free trade agreements.

International Trade committee  Thank you. I'll cover the next little section here. Our worries over the lack of a free trade agreement with Korea became very acute in 2011 when virtually all of our competitors in that market started benefiting from their own countries' FTAs with South Korea. In the food business, a business of very small margins of profit, when facing tariffs of well over 20%, Canadian exporters have quickly found themselves unable to compete in that market as others acquire huge tariff advantages as has happened with the United States, the European Union, and Chile.

Agriculture committee  To Mr. Preston, I don't know where Darcy gets his numbers and I'll have to talk to him, but our calculation would be about 1 million hogs rather than 8 million from that European market.

Agriculture committee  But we do associate that with 5,000 jobs, direct jobs, permanent jobs, plus the induced effect of that additional export. So $400 million would convert very easily into $1 billion in terms of additional economic activity.

Agriculture committee  We have several examples where Canadian industry, because of such a great dependence on exports, has been quite adept at creating standard specifications. For example, in Japan there are a couple of cuts that really originated between Canadian suppliers and Japanese buyers. Canadians are known as being able to take care or attend to, and not afraid to change our production lines to meet these specifications.

Agriculture committee  It's a wonderful position to be in because we're finding ourselves behind the U.S. in several other situations, notably Korea, but others as well, Latin and Central America, where they've gotten a head start on us. I think, at the minimum, it will be three years before the U.S. has a deal with Europe.

Agriculture committee  For sure, we've been limited by ridiculously high tariffs, ridiculously onerous barriers to entry. We have had some success already. There's notably one company in Quebec that did have some sales. Again, the tariff quota administration was so onerous that it just became impossible.

Agriculture committee  Very quickly, the current tariff situation on exports to Europe is 20% to 30%, effectively ad valorem tariffs, which is far too high a tariff for us to get any product into Europe. There are significant issues of having to get licenses and put deposits down that are going to be cleared away by having the quota administration moved to another department of the European Commission.

International Trade committee  We have an opportunity to ship something in the order of 75,000 tonnes of pork into the European Union under the WTO quotas that exist. However, we haven't used it, other than for a very short period about three years ago, because of very, very high tariffs and very difficult tariff quota administration issues.

International Trade committee  Well, there will certainly be an important role for the Canadian Food Inspection Agency in inspecting plants that are possible additions to the list. Right now we have four plants which are or could be very easily re-certified, and which together could ship in the order of 20,000 tonnes.