Canada-Korea Economic Growth and Prosperity Act
Mr. Speaker, it is my privilege to stand today in the House to commence third reading of Bill C-41, the historic Canada-Korea free trade agreement, which, as I have said in the House before, represents Canada’s first free trade agreement in Asia. It is a free trade agreement with a partner country in Asia that represents the third-largest economy in Asia, and it is a country Canada has had a strong, and in fact, historic and deep relationship with for almost 70 years.
The Republic of South Korea represents a population of 50 million people and an economy of $1.3 trillion. It is the 15th largest economy in the world by GDP, and it is already Canada’s seventh-largest trade partner in terms of two-way merchandise trade. It is a very exciting opportunity for us.
In my remarks I will also touch upon some of our strong ties. They make our agreement with Korea an important one, as our first in Asia, with an appropriate partner, given our shared history.
It is also strategically important, because in recent years, some of our friends and competitors in global commerce have reached agreements with South Korea. In 2011, the European Union reached a free trade agreement with South Korea. We have seen tariff rates drop for exporters in the EU countries. More critically, in 2012, the U.S. entered into a free trade agreement with South Korea. Months before we reached our final agreement, Australia reached an agreement in principle and a final agreement with South Korea for free trade.
That is critical, because these are some of our strongest friends and allies, but they are also our competitors. For some of our world-class exporters in industrial goods, agriculture, seafood, and forestry, which are some of the sectors that will have tremendous opportunities in Korea, their main competitors are in that market. It is critical for our country to take advantage of a free trade agreement that will get our exporting sectors, particularly some of our lead sectors, back on a level playing field with their international global competitors.
The review of this agreement and the opportunity it presents to Canadian exporters is tremendous. It is expected to increase trade by 32%, for a net impact of almost $2 billion on the Canadian GDP. It is historic.
As I have said in the House many times before, particularly to some of my friends in the opposition who forget this key statistic, one out of every five jobs in Canada is directly attributable to trade. Canada is a country of 33 or so million people. It is one of the best, brightest, and wealthiest countries in the world, with tremendous resources and tremendous people. It is a strong, diverse country, with an economy that reflects that.
However, in a global economy, we cannot survive by just selling to ourselves. I am proud to be part of a government that has put trade at the forefront of its economic strategy.
Another point I have raised in the House before is that it is actually Conservative governments that have secured almost all of our market access for exporters. Those one in five jobs are, in many ways, attributable to both the Progressive Conservative government of Brian Mulroney, with the historic U.S. free trade agreement and NAFTA, and, critically, this government and our Prime Minister and the Minister of International Trade. I work with them closely as the parliamentary secretary. They have secured 98% of market access for our exporters. That is truly an incredible statistic. It is virtually all their market access. In fact, many of the very few small free trade agreements the Liberal government of Prime Minister Chrétien was able to secure we are actually going back and enhancing and augmenting to make them better.
I am glad we are here at third reading, and I am glad the NDP has made a strong decision, for once, on trade and will actually support this agreement and our swift passage of this bill, Bill C-41, because January 1 is a critical deadline for our exporters.
I said earlier in my remarks that our competitors in the EU and U.S. already had free-trade agreements. New tariff reductions will kick in on January 1 and if we do not have our agreement in place by January 1, yet another little delta, another little change between Canada and its competitors will come into place. That is something we just cannot afford to happen.
I would like to thank John Masswohl from the Canadian Cattlemen’s Association who appeared before the Standing Committee on International Trade on this very point, saying that as of January 1, tariff rates would change for beef, a key sector for us in South Korea, and our American competitors in that space will leap ahead as that tariff rate ticks down. I think he said that there would be a point spread of 10.7% between our world-class beef and some of the American beef. This shows us that time is of the essence, and that is why I am glad we are here at third reading. It looks like we are on track to have this in law and able to take advantage by January 1 and not fall behind some of our key competitors.
In my speech at second reading, I took time to talk in-depth about the relationship between our countries and about the visit I had to South Korea several months ago to help secure passage of this deal through its national assembly. I spoke about how touched I was by the person-to-person ties that had been developed between our countries.
Indeed, South Korea represents one of our best friends as a nation and a key ally in Asia. It is an almost a 70-year relationship, starting with missionaries, many of whom were still remembered in Seoul when we were there. They were bringing faith and education, and enhancing education on the ground, ensuring it was accessible for more people.
We can see the tremendous progress that has taken place since then. A country that 60 years ago was one of the largest net recipients of food aid from around the world is now one of the largest contributors of money to the United Nations’ food programs. It is a remarkable statistic accomplished in just two generations. Education, openness and an increasingly strong democracy in South Korea has been key to that achievement.
There are approximately 200,000 or so Korean Canadians who have also been key in building these bridges between our countries, and I spoke about several of them. I still speak with Mr. Ron Suh, who was on the ground in Seoul. He advises the government of South Korea as part of the National Unification Advisory Council. People around the globe with Korean lineage work with the country on the ultimate goal of having North Korea emerge from its decades of darkness and reunify the peninsula again. Mr. Ron Suh remains a strong component. He is an example of one of these 200,000 Canadians who have brought our countries closer together and who are very supportive of this deal.
For me, as someone who served in uniform for 12 formative years of my life, the highlight of my trip to South Korea was spending time with Minister Park, the minister for Patriots and Veterans Affairs in South Korea. I found that title unique and I asked him about it. When the people were under attack from the north and from Chinese forces, it was not just the military or nations like Canada that stood firm with them to try to preserve their country, but also members of their public. Everyday citizens were called into action, and they are referred to as the “patriots”. It was not just uniformed members of their military; indeed, it was everyone, men, women and children in some cases. They are the patriots in the department of patriots and veterans affairs.
Our delegation joined Minister Park at its national war memorial and war museum. We laid wreaths at the Hall of Honour, where the 516 Canadian names appear on the tablets, the ones from the almost 26,000 Canadians who responded 60 years ago to the United Nations call to respond to the conflict on the Korean Peninsula.
Staring at those names as a modern day veteran was moving, names from across the country, French and English. These were young people in their prime, many of whom had served just years earlier in World War II and served again. Without hesitation, the Korean people deeply respect that sacrifice and remember it to this day.
In my last speech in the House, I said that from school children to ministers of the government, everyone thanked our delegation for Canada’s historic efforts to secure their democracy and the country that is South Korea today. That is moving when we see remembrance as a cornerstone of their civic duty and culture.
For me, I am also fortunate. A good friend from my riding who lives not far from me in Durham, Mr. Doug Finney, is the president of the Korea Veterans Association of Canada, working with veterans on remembrance, both here in Canada and in Korea.
Ted Zuber is a war artist. He is from the Royal Canadian Regiment. One of his stunning paintings fundraised by the Korea Veterans Association has a place of honour in their national war museum. It depicts some of the battles related to the Battle of Kapyong, in which the Princess Patricia’s Canadian Light Infantry demonstrated heroics, saving Korean, American and Australian lives with that tremendous battle, even calling in fire on Hill 677, their own position to hold that line.
To this day, the PPCLI remains one of the few world regiments that has the U.S. presidential citation that members wear on their uniforms. That is for the heroic deeds at Kapyong.
It was very important for me to write in the Book of Remembrance that I was visiting its museum in the centennial year for that regiment, a regiment that was founded in Ottawa 100 years ago last month.
We were fortunate just last month, September 20 and 21, to have a state visit from President Park from South Korea as part of our historic engagement on this free trade agreement. I was fortunate to join the Prime Minister, other members of the House and my friend Doug Finney on behalf of the Korea Veterans Association at a state dinner hosted by the Governor General.
It was clear, the affection between the countries, from all the remarks that evening. The Governor General himself reflected on his recent visit to South Korea, describing it as both a beautiful and flourishing country. What struck me in particular about his remarks was he said that he greatly admired its tenacity and creative spirit. I hope Canadians can see that we are indeed part of helping them establish the modern country they have today.
This agreement, in many ways, represents the next stage in our relationship as two countries. This will reduce tariff rates between our countries to allow us to trade under most favoured nation status. Most favoured nation should be the status between countries as close as ours.
I recited dozens of tariff lines in my speech at second reading. I certainly do not want to bore the House too much with the same tariff lines. Therefore, I will try, for a few moments, to talk about how these tariff lines, 4.7, 10.8 that seem like regulatory numbers lead to jobs. One in five Canadian jobs is attributable to trade, as I said at the outset. I will talk about a few strategic markets for that.
Seafood is a huge winner. Having lived in Atlantic Canada for many years, and having married into the Atlantic Canadian Grant family in Fall River, Nova Scotia, I know how proud Atlantic Canadians are of their seafood industry. Newfoundland, Prince Edward Island, New Brunswick, Nova Scotia have tremendous wins. Canada is recognized for seafood, and there are tariff rates of up to 47%.
At 47%, if they have to add that to their price, our exporters, our fisher processors and our fishermen will not have access to that market, lobster in particular. Atlantic lobster is the best in the world, bar none. It is already selling in to the market in South Korea. I said in my last speech how at Chuseok, the South Korean thanksgiving, lobster is considered a treat that South Koreans bring to their family to celebrate thanksgiving and their origins. It has a 20% tariff rate for live and processed lobster. Eliminating that at a time when we already have access to that market, even with the higher price because our lobster is better, just means huge opportunities for Atlantic Canada.
While in Halifax on a visit, I had the pleasure to meet with officials from Korean Airlines, which has already started direct cargo flights from Halifax of Atlantic lobster, primarily from New Brunswick and Nova Scotia, to take advantage of the market. As of January 1, once we get this through the House, the 20% tariff rate will come down, meaning huge opportunities for Atlantic Canada.
Regarding industrial goods, I am from Ontario and we are very proud of our manufacturing industrial sector. Ninety-five per cent of tariff lines will be eliminated when this agreement comes into force. Why is that so important? Increasingly, in our global economy there are global supply chains. Even if there is a manufacturing plant in a country in Asia, it may source supplies for its assembly from around the world. We are seeing that already. Great Canadian companies like Magna and others have already taken advantage of this in auto and elsewhere. This is an opportunity, with these tariff reductions, to have more of our companies compete for work in the supply chain. The South Korean conglomerates are well-known in trade around the world, and that is an opportunity for our employers.
In agriculture and agri-food, 85% of agricultural tariff lines come down as part of this agreement. There are huge wins for pork. I toured the facility in Brandon, Manitoba along with the MP for Brandon—Souris. There is huge opportunity in that industry.
For beef, grain and oil seeds, there are huge wins.
For fruits, such as blueberries from Atlantic Canada, there are tariff reductions on all of them. It means great opportunities as the people of the rising middle class in South Korea demand high-quality food from a safe, strong, healthy regulatory regime like Canada’s. They will pay more already but with tariff lines coming down, it will be even more competitive.
David Lindsay from the Forest Products Association of Canada appeared before our committee. In regard to forestry products, there are tariff reductions in the range of 2.9% to 10% for wood and finished wood products. I toured with an employer who has assembly plants for value-added wood products in Ontario and in British Columbia. He predicted doubling his workforce based only on the South Korea market. He is certainly equally as optimistic about the European Union trade agreement and some of our other negotiations, but that is for this one country alone because of the burgeoning middle class in that country.
We are very proud of our auto industry in Ontario. As I said in my last speech on this issue, my dad is a GM retiree. I am proud of our roots in the Oshawa area for auto manufacturing. We have secured a deal that is equal to or even better than some of the outcomes the U.S. achieved for autos. What is critical here is entering into the supply chain and jobs in the auto supply and parts sector is as critical to the Ontario economy as it is to the big manufacturers. As I said in my remarks the first time, what many Canadians seem to forget is we are very proud of Ford, Chrysler and GM, and it came up in question period today. They are all subsidiaries. The senior management teams in each of those cities do not make the decision on what rolls off the production line. That decision is made in the United States, which already has a free trade agreement with South Korea.
Why, as responsible legislators, would we allow our auto sector in Ontario to have one less country it can access on the same terms as the U.S. plants? We know that in this global auto age, they compete against one another for jobs.
This is a huge win for Canada. It is up to a $2-billion hit to our GDP. I really hope that all members in the House vote in favour and that we have quick passage.