Canada-Korea Economic Growth and Prosperity Act
Mr. Speaker, it is my honour to stand today in the House to speak to the Canada-Korea free trade agreement. I am proud of the work done by our Prime Minister, our Minister of International Trade, and truly our government in growing new markets for Canadian employers, because one in five jobs is directly attributable to trade. It is an honour for me to talk about yet another important trade agreement that this government has brought to Canadians and to Canadian exporters.
I am also going to use some of my remarks today to talk about why I am very proud of this agreement in particular, as a Canadian and as the member of Parliament for Durham, for bringing together two peoples who have a deep and rich shared history, although it is only about 70 years long in duration. Our relationship was forged in the battles of the Korean War and has emerged as an important relationship for Canada and Asia. I will dedicate a few remarks to that aspect of the relationship.
Trade promotes dialogue between nations, and it also promotes security. The deals we are negotiating are not just huge wins for Canadian employers, but they are also huge wins on international security and helping make sure that globalization allows all people to benefit. The result will be a mutual dependence between countries on the trade and commerce front and more stability and security for their citizens, particularly in Asia.
This is truly yet another incredible free trade agreement negotiated by our government. The Korean GDP is $1.3 trillion. Korea’s economy is the 15th largest in the world and it has roared into that position in the last few decades. It is already Canada’s seventh-largest trading partner, which is an important point that we focused on. It is a market of 50 million people, and increasingly, a market that is seeing a middle class emerge in the country, and with that middle class comes the demand for quality of products, particularly food and agricultural products, from a country like Canada. People want to provide the best food in the world for their families, and we are seeing that in Asia, particularly in South Korea.
We are following a pattern of engagement to make sure we also keep the playing field level with our main competitors in global commerce. The European Union negotiated a free trade agreement with South Korea in 2011. The United States negotiated a free trade agreement with South Korea in 2012. We have been at the table pretty much alongside our friends and competitors from Australia. We want to make sure our exporters have a level playing field and the opportunity to grow in an important market. Since the U.S. free trade agreement with Korea came into force, we have seen a reduction of $1.5 billion in exports to South Korea because of the tariff elimination that some of our competitors saw.
We were still able to forge a great deal. We do not rush and make a poor deal on behalf of our exporters. We make sure we stay at the table to negotiate an ambitious and important outcome, and that is where we are at.
A review of this free trade agreement has led to estimates that our exports to South Korea would increase upon implementation of this deal by 32%. That is almost a $2 billion addition to our gross domestic product. When fully implemented, the agreement would remove duties on 98% of tariff lines.
I will go back to what I said at the beginning of my remarks. One in every five Canadian jobs is attributable to trade. Deals like this not only secure those jobs that are there now, but they grow more, because as a modest country in the 33 million to 35 million range, we need to sell beyond our borders.
I would remind the House, particularly people who are just waking up to the benefits of trade such as my friends in the NDP, it is Conservative governments that have granted Canadian exporters access to 98% of the markets that are available to Canadian exporters. Pretty much every trade deal or all of that access is attributable to this government and the last Conservative government. That is a fact that as a free trader I am very proud of. Our exporters, once given a level playing field, can compete with the best. Those are the opportunities, an almost $2 billion addition to our GDP from this deal.
What are the big winners? As parliamentary secretary, I have had the good fortune of visiting parts of this country to talk trade, to talk this agreement and to help industries consider market access to take advantage of these agreements. The big winners are all regions of the country because of their particular products, and I will run through those, but also our agricultural sector. In the years of our best friend and trading partner to the south playing games on the trade front with country-of-origin labelling and things like this, our beef and pork producers needed secure access to a growing market. Korea is big beef- and pork-consuming market. It is only going to grow more. The Koreans want access to high-value, high-quality products, yet we could not get in there.
First, there were regulatory issues that we had to smooth out, but also a tariff rate of up to 72% on beef and beef products. Adding 72% to the cost means we cannot access that market; it is as simple as that. Pork and pork products had a 30% tariff rate with most pork products and processed pork products. The tariff walls that Canada has had in reverse on some South Korean products are trivial in comparison. We are talking about 4% or 5% nominal tariffs that an efficient business can perhaps absorb. We cannot absorb a 30% or 72% tariff rate, so those markets are essentially not accessible. Now they will be.
Another huge winner is a part of the country that is dear to my heart. Atlantic Canada will have immense wins with this deal, and British Columbia as well and potentially the Arctic. Seafood tariffs were another one of those high-tariff ranges, ranging from 16% to 47% tariff rates. That is essentially a tariff wall.
I had the honour of being in Korea a few a weeks ago, and I will speak to that in my remarks shortly. We were there a few days before the beginning of Chuseok, which is the Korean thanksgiving celebration. The Koreans were happy to tell us about this and we were talking about the differences between our Thanksgiving and theirs. Theirs is more of an ancestral history event where they go back to the town where they grew up, and it is a point of honour for them to bring a special food to their ancestral home and their family at Chuseok. The most popular food in the last year to two years was Atlantic Canadian lobster. That is a product that already had a 20% tariff rate, yet people were recognizing that the best lobster in the world comes from Atlantic Canada and they were still absorbing that 20% hit. That is going to be eliminated.
I was also fortunate to be at the Halifax Stanfield International Airport some months ago to meet with Korean airlines officials as they sent their second of many dedicated cargo flights to Halifax to take Atlantic lobster back to South Korea, where most was consumed in South Korea or traded in Asia. That is a market we have already been forging, and it will only benefit more from this deal.
Wood and wood products, another major export for us, had tariffs in the 5% range on most wood products and 10% on processed wood products. I have seen first-hand Viceroy Homes, which employs people in both Port Hope, Ontario, and in Burnaby, B.C., a Unifor unionized workplace that has predicted it will double the size of its workforce as a result of South Korea alone. It already had market access as a high-value wood-product company of windows and homes. With the reduction of the 10% tariff, it is now very competitive and it is hiring Canadians because of that.
In Newfoundland and Labrador, frozen shrimp and a lot of crab products have a 20% tariff wall. In Nova Scotia, known for its blueberries, there is a 45% tariff on fresh and 30% on frozen. In Prince Edward Island and New Brunswick, parts of our country known for potatoes and processed potato products, such as french fries, of which I perhaps have had a few too many from time to time, there is an 18% tariff rate, making it hard to be competitive in that market.
In Quebec, maple syrup has an 8% tariff. As for flight simulators, CAE is a company I visited while I was in South Korea to see its investments in that country. On flight simulators there is a 5% tariff rate that will come down. In Ontario, aerospace and rail has an 8% tariff. On nickel products and a lot of refined metal products, there is an 8% tariff. In Manitoba, chemicals have an 8% tariff. On pork, as I said earlier, there is a 30% tariff. I toured the Maple Leaf site in Brandon, which is waiting for access to South Korea. It has made the investments and is ready to do it. It just needs the markets that we are now opening up.
In Saskatchewan, canola oil has a 5% tariff. One of the craziest ones is unroasted barley malt, which has a 269% tariff rate. That is a wall. That is a tariff cage, I would suggest. In Alberta, industrial machinery is at an 18% tariff rate. Once again, Alberta beef, which we just enjoyed here in Ottawa last week, has a 72% tariff rate. We cannot access those markets. In B.C., of course, which has a robust, diverse economy but is also known for its wine, wine has a 15% tariff rate. I know my friend, the MP for Kelowna—Lake Country, is quite keen to see access to that market increase.
This is our first free trade agreement in Asia. As I said at the outset of my remarks, the cultural and historical bonds between the countries make this a perfect partner for our first FTA in Asia because its dynamic economy, which is now the 15th largest in the world, with brand names we all recognize, that opportunity and freedom was secured by Canadians.
There were 26,000 of our young men and women who served in the Korean War from 1950 to 1953, and 516 gave the ultimate sacrifice. When I was in South Korea last month, I was amazed. From schoolchildren to ministers of the government, every one of them thanked us for that commitment 60 years ago. That is the foundation upon which our relations are built. This is a lovely evolution to that relationship now, that we will drop our tariff walls and fully trade as partners.
Many of us took part in the PPCLI, Princess Patricia’s Canadian Light Infantry’s 100th anniversary just last week on the Hill. There was a wonderful parade, joined by the Van Doos, another proud regiment also celebrating its century. That regiment distinguished itself on the battlefields of South Korea.
In the battle of Kapyong, the PPCLI was one of the few units, the only Canadian unit, to receive a presidential unit citation because its bravery over the course of several days, repelling a communist Chinese advance and saving the lives of Americans, New Zealanders, Australians, and Koreans. They were surrounded. They called in fire on Hill 677, their own position, to make sure they held that line. That is the Canadian commitment to countries such as South Korea and that is why I was so touched to see that first-hand in Seoul.
I also had the honour of joining Minister Park, Korea’s Minister of Patriots and Veterans Affairs, at the national war monument and national hall of honour, where our delegation, which included the MP for Haliburton—Kawartha Lakes—Brock and Senator Yonah Martin from British Columbia, laid wreaths at the hall of honour and at the 60th anniversary marker that our government erected when we tried to make sure that our veterans from the Korean War do not think of it as the forgotten war anymore. We have been trying to show them how much we appreciate them. Minister Park laid those wreaths with us and spoke with fondness of the Korean War veterans from Canada he has met over the years.
In the hall of honour and in the war museum, we got to see the spectacular artwork of Canadian war artist Ted Zuber. It was really Korean veterans themselves who raised a lot of the money to hang that spectacular painting by a Canadian artist, a war artist who, incidentally, served in the Royal Canadian Regiment. Now I have named all three of our regiments. His work depicting our service and sacrifice in South Korea is stunning and sits in a place of honour in that war museum.
On a personal level, in Durham, my friend who lives quite close to me, Doug Finney, is currently the president of the Korean Veterans Association of Canada representing those veterans in Canada. I was honoured that he was able to join our government, the Prime Minister and the Governor General at a state dinner just last week at Rideau Hall honouring the visit of President Park from South Korea, the night before the historic signing ceremony for this trade agreement.
We are forged in the history of war and of conflict, but what has emerged is a robust, strong democracy in Asia that is now our gateway into a fast and growing part of the world.
The Koreans I met were truly inspiring. Our first evening in Korea we met with children from H2O Pumassi, who had just two months earlier visited Canada to come and thank our veterans. In fact, in solemn ceremonies, they even washed the feet of some of our veterans. These are children whose parents may not have even born when the conflict took place. Their deep remembrance of our sacrifice is palpable and moving for us. That was our first dinner. They hosted us to show us photos of their trip to Canada. It was truly inspiring.
Many Korean Canadians came here for opportunity, have done well and are now trying to help out back in their home country. Mr. Ron Suh was on the ground in Seoul and joined us for some of the events. He has been working to build bridges for decades as the regional president of the National Unification Advisory Council. It is a position that the president of South Korea asked Ron to fill so that he could work as part of the diaspora toward unification, which is something I think all of us would like to see to eliminate some of the horrors of oppression in North Korea. People who have been building these person-to-person ties between our countries since the war are inspiring.
Similarly, there are South Korean veterans who fought in the war and then immigrated to Canada afterward. They have an association and I have been very fortunate to meet some of these veterans in my travels across the country. They are the living embodiment of the bridge between our countries.
Our work in the national assembly during that visit was to make sure that our friends in South Korea ratified the deal on their side quickly, as we will in the House. I have to thank Minister Park and Minister of Education Hwang; Representative Chung, the speaker of the national assembly who met with us and hosted a meeting; Representative Kim and the trade committee, who we met with us directly to ensure quick passage of this free trade agreement.
We also met with members of their opposition to make sure that events in their country at their national assembly and other things did not interfere with the passage of this important new evolution of our relationship as countries. We met with Representative Woo, the policy chair for the opposition coalition, NPAD.
I thank all of those representatives for the meeting and for helping forge the bonds between our countries.
Durham is an area with a history of a strong and productive auto industry with General Motors in Oshawa. My father is a GM retiree. As the member of Parliament for Durham, I am happy to say that our government has secured an outcome on automobiles that is as strong or stronger than some of the provisions our U.S. friends have. Not only do we get immediate duty-free access to those markets, but we have a permanent specialized dispute settlement procedure for non-tariff barriers.
This is not a five-year dispute settlement such that the U.S. secured in its agreement. We have a permanent dispute resolution so that we can make sure that our automakers have access.
An important point that some of my friends in the opposition like to ignore is that the decision on what vehicle rolls off the lines for our great and productive workforces in Oshawa, Oakville and Windsor is not made at the Canadian subsidiary. That decision is made in Detroit.
How could our government possibly allow our country and those plants to have one less market that they could access? How could we possibly do that? I said to Unifor and representatives of one of the big three that it would be against our national interest. We want to make sure our plants, which are some of the most efficient in North America, have the same market access as their counterparts in the U.S. because they compete for new products to roll off their lines.
I hope that, with my remarks today, I have shown why South Korea is our partner in Asia with our first free trade agreement there. It is a relationship forged in sacrifice, service, and mutual respect. This agreement would be a tremendous win for both countries.