Balancing
Trade and Prosperity
By:
The Honourable Navdeep Bains, Liberal Opposition Critic for International
Trade
Getting
free trade right has never been more important.
Canada is a trading nation and most of our economy is either
directly or indirectly tied to trade with other countries.
We are competing with other nations and must proactively secure
markets especially emerging economies where our experience and knowledge
is extremely valuable. Trade
agreements are therefore vital to our continued prosperity and
competitiveness.
We
must encourage the Government to pursue strategic trade agreements and
open up markets to Canadian businesses.
All Canadians benefit enormously from a well-negotiated deal. As in any deal there are winners and losers but a
Government’s duty is to ensure that any agreement is in Canada’s
overall best interest. Sadly
the proposed agreement with South Korea would not meet this standard.
South
Korea is a modern and maturing market strategically positioned between two
of Canada’s most important trading partners (China and Japan). It offers great possibilities for Canadian business just as
Canada offers great opportunities for Korean enterprises.
However as things currently stand the playing field is anything but
level.
South
Korea has a history of protectionism and employs a host of non-tariff and
regulatory barriers that make it very difficult for outside companies to
penetrate their market. This
is particularly true for the auto sector.
According to the CAW, for every 1 Canadian car exported to South
Korea, Canada imports 400 South Korean cars.
That means that last year out of the mere 40,500 foreign cars sold
in South Korea less the 500 were produced in Canada.
This is anything but fair and balanced.
The
Minister of International Trade stated that the reason for this imbalance
is that Canadians do not build the kind of cars that the South Koreans
want. This is not the case.
When one compares the sales of different auto segments, the
Canadian and South Korean markets are nearly identical.
What
is also important in debunking this myth is the percent of foreign
imported vehicles into South Korea. The
average for OECD countries is 48%. The
South Korean share in 2006 is 4%. This
means that it’s not only Canadian and U.S. manufactured cars that cannot
penetrate the South Korean market; it is all foreign produced vehicles
including Japanese and German autos.
Even
when agreements are in place there is still no guarantee that the South
Korean government will actively implement them.
In the 1990’s the United States signed two memorandums of
understanding with South Korea; both of which the South Korean Government
failed to live up to.
The
Canadian auto industry is the crown jewel of our manufacturing sector.
It produces over 2.5 million vehicles annually and employs one out
of every 6 people in the province of Ontario.
In fact, Ontario is the leading jurisdiction for auto production in
North America and 10th largest in the world.
We can and will compete with the world but we need a level playing
field.
The
negotiations on South Korea in their current form put Canadian
manufacturing jobs in peril. These
are high value jobs with an average salary of $72,000.
The Canadian Automotive Partnership Council estimates that the
three levels of government combined collect $10 billion a year from the
auto industry; and that for every job lost in the sector there are between
7 and 10 spin off jobs lost. Our
continued success and way of life depends on the Government addressing the
concerns of manufacturers before any agreement is signed.
Last
Saturday, the Trade Minister conceded that despite his earlier
pronouncements, the auto sector had indeed become a sticking point in
negotiations. After initially
dismissing the quality of Canadian-made cars as the reason for our
automotive trade imbalance with Korea, he has now conceded that there are
barriers that need to be addressed. These
are the conditions that must be met before any deal is finalized
The
opposition parties in the House of Commons are united in their concern on
this issue and will continue to hold the Government to account. If and when an agreement with South Korea is signed, it must
promote free and fair trade. We
owe it to our manufacturing sector and our future prosperity.
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Contact:
Office
of the Honourable Navdeep Bains
(613)
995-7784
