Mr. Speaker, I am very pleased to rise in the House today to debate Bill C-41 on the Canada-Korea free trade agreement.

The Liberal Party and I support the initiatives that lead to free trade agreements. There are definitely many advantages to free trade agreements, and it goes without saying that Canada's economy gains strength when markets are opened. That is why we will support the bill to establish a partnership between South Korea and Canada.

We believe that it is important to establish a special relationship with South Korea, since we do more than $10.8 billion of bilateral merchandise trade with this country. Furthermore, South Korea already has free trade agreements with the European Union and the United States, which is an incentive for us to act quickly. We are now playing catch-up. We could end up at a serious disadvantage if we delay an agreement with South Korea even further.

Canada already lost more than 30% of its share of the South Korean market when South Korea signed agreements with the United States, the European Union and Australia. Since negotiations have been going on for nearly 10 years, we sincerely hope that this agreement will take effect quickly. Strategically, we are lagging far behind on markets we should already have access to.

This is the first free trade agreement that establishes an agreement with an Asian country, yet our primary trading countries are Asian countries, including Japan, China and Korea. The government is lacking a clear vision when it comes time to targeting new markets or quickly carving out a space in emerging markets.

The government boasts about signing free trade agreements, as we saw with the last member who spoke, but we have had some significant trade deficits since 2009. The announcement of a free trade agreement with South Korea will not magically fix that situation, as the Conservative government hopes. We think that the government needs to commit resources and make investments to increase trade.

For example, since the free trade agreement between South Korea and the United States was established, Canadian pork producers have lost the Korean market to the United States. This situation is unacceptable. We should have acted much more quickly before these kinds of things happened. Now that the agreement has been signed, this government has the duty to protect these industries and ensure that they regain their market share.

As the Liberal critic for small business, I am aware of the importance of this agreement for Canadian workers. Removing tariffs is often the support small and medium businesses want, to ensure that they have an equal chance of being competitive on the markets. The agreement can only help Canadian companies doing business with South Korea and the many subcontractors involved.

This agreement is even more beneficial when you take into account that the customs tariffs imposed by South Korea are about three times higher than Canada's, and they will be eliminated, on different schedules, once the agreement is in effect. These are small things that will matter a lot at the end of the year for Canadian small and medium-sized businesses.

I am pleased to hear the news for Canadian entrepreneurs who do business with South Korea, but I hope it is not too late for those who would like to enter the Korean market. Indeed, the various competitors from other countries have already become well-established since the signing of free trade agreements that preceded ours.

From another perspective, what concerns me about the free trade agreement between Canada and South Korea is the current situation with the Canadian automobile industry and what will happen once this agreement is implemented. The Canadian and North American auto market has already been significantly infiltrated by Korean vehicles.

About 100,000 Korean vehicles worth $2.6 billion are imported into Canada annually, while Canadian or North American vehicles do not really reach the Korean market. One hundred or so Canadian vehicles worth about $12.5 million are exported annually to South Korea.

Objectively speaking, it would be wrong to believe that free trade will create a balance. The government is really turning its back on the auto industry under this agreement.

In the final agreement summary, only South Korean imports from Canada are mentioned. There is no mention of Canadian imports from South Korea. We can therefore neither compare nor see the scale of the imbalance.

The government has gotten us used to that kind of thing: hiding important information to make it easier to pass bills that might be controversial. My concern is that the gap will only grow wider.

According to Unifor, Canadian auto sector imports from South Korea have increased by 1,010% since 1997. In that sector, the benefits are exclusively South Korea's. A greater number of Korean cars will enter the Canadian market, and it will get harder and harder to compete.

Another important and interesting aspect of the bill we are debating today is that it would not change anything in terms of intellectual property. Since becoming a member of the Standing Committee on International Trade, I have seen how big a global issue this has become. There are increasing demands to improve intellectual property protection, and there is a lot of pressure around that in various agreements.

From negotiations with the European Union to creating a trans-Pacific partnership, there is always disagreement about intellectual property. The surprising thing is that when a country complies with international intellectual property protection standards, a negotiating partner can ask it to do even more than the good things it is already doing, can expect all the parties to an agreement to use the same system. I am surprised but pleased to see that a free trade agreement that respects each country's system can happen.

Will the government be able to respect and protect our own Canadian standards as it negotiates agreements with the European Union and the countries working on a trans-Pacific partnership? It is difficult to tell at the moment, but our preliminary information suggests that the European Union's high expectations regarding intellectual property seem to be finding their way into the final agreement.

Over the course of the committee meetings, we repeatedly heard concerns about increased protection for intellectual property from representatives of various fields, including the pharmaceutical field.

Just this week, since the text of the final Canada-EU agreement was released, Canadians have already expressed concern about the potential increase in costs for drugs, as well as the possibility of higher costs in our health care system. I sincerely hope that their concerns will be taken seriously by this government.

To get back to the bill being debated today, I wish to support it so that it can be sent to committee for further study. I hope that we will have the viewpoints of all the sectors and stakeholders of society in the testimony at committee.

I hope that this agreement will not add significantly to the imbalance we can see in the automotive sector or that the government will at least keep an eye on the health of the Canadian sector.

I also hope that this agreement will help Canadian businesses by fostering more and more trade between the two countries. I think the elimination of trade barriers can only benefit the majority of Canadian businesses.

As I said before, such agreements have significant repercussions on local entrepreneurs. In fact, customs tariffs alone can account for many unnecessary direct and indirect expenses for small businesses.

Massimo Pacetti

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