Canada-Korea Economic Growth and Prosperity Act (Bill C-41)

Elizabeth May: Mr. Speaker, I am pleased, as this debate continues on the Canada-Korea free trade agreement, particularly on Bill C-41, which would bring the treaty into effect, that as the leader of the Green Party of Canada, I am able to put more fully on the record the position I have stated so far through questions and comments. The Green Party will not be supporting this treaty. I will explain the fundamental reason and then will go into some of the details.


Fundamentally, the Green Party of Canada will never support an agreement that includes an investor state provision. We believe investor state provisions are, by definition, anti-democratic. By definition, the notion that we should allow a corporation or investor from another country to have superior rights to Canadian companies in response to Canadian laws, whether passed at municipal, provincial, or federal levels, is offensive. The first of these was chapter 11 of NAFTA.

I will go into more detail later as to why we oppose investor state agreements and the particularities of the Canada-Korea agreement. I also want to back up and say that in the Canada-Korea treaty, the Green Party believes we missed our opportunity to ensure that we had a more balanced deal.

Let me say this about South Korea: what a tremendous economy it has built. In the wake of the collapse brought about by currency speculation, the trading in currencies that created a meltdown of what were then described as the Asian tigers, Korea, through a lot of state-led economic policy, has built an economy that is championing renewable energy, as some of my colleagues in the NDP have mentioned, and championing clean tech. There is a lot to be admired in what South Korea is doing. Therefore, the comments I am making about this trade deal are not in any way to suggest that South Korea is not a really impressive democracy doing a lot with technology.

The difficulty the Green Party has is with the way this trade treaty is going to go forward. We agree with the concerns of the auto sector in Canada, both the CEO of Ford and Unifor, representing the workers, that we will lock in our trade imbalances and not reduce them.

I know some of my colleagues have mentioned Unifor. Let me read into the record the views of the CEO of Ford Motor Company of Canada, Dianne Craig, who said, in response to this treaty, “…South Korea will remain one of the most closed automotive markets in the world” under the new deal. She went on to say that the trade agreements the U.S. and the European Union have executed failed to reverse their negative trade flows, but those treaties were more protective of their domestic car markets than Canada’s treaty with Korea would be.

I am again quoting the CEO of Ford Motor Company of Canada: “No Canadian manufacturer can compete with a market controlled by non-tariff barriers and currency manipulation”. Of course, we know that this agreement does not deal with those barriers to Canadians’ access to the automotive market.

It is quite true that we have a lopsided relationship in trade with Korea. In 2012, we were exporting $3.7 billion worth of exports to Korea, and $3.7 billion is an impressive number. However, we were importing $6.4 billion in imports from Korea. The story of what constituted that $3.7 billion worth of exports and $6.4 billion worth of imports is worth touching upon.

Canada has largely been exporting raw resources to Korea. Under this deal, the commodities touted in the materials that have accompanied the deal have talked about what this would do to improve agricultural exports and raw commodity exports, whereas when we look at what we have been importing from Korea, it has been high-value manufactured imports.

Let us look at what Canada has been exporting to Korea. I will quote Jim Stanford, who is a very respected economist who works with Unifor. He put it this way:

We export mostly raw material to Korea, and we import sophisticated high technology products from Korea.

Continuing the quote from Jim Stanford, he said:

Canada’s top four exports to Korea last year were coal, copper, aluminum and wood pulp. Our top four imports were motor vehicles, electronic circuits, auto parts and smartphones.

There is nothing in this trade deal that is going to change the characteristics of what we are importing and what we are exporting. I referenced the history of what we have seen with the quote from the CEO of Ford Motor Company of Canada. She certainly mentioned the experience of the U.S. and the EU. Concluding trade deals with Korea did not change the gap that existed in trade flows. In other words, having executed deals like this, and ones that were more protective of their auto markets, they still saw the trade deficit with Korea expand.

There is something wrong. This is a larger conversation I would like to have someday in the House. The Green Party believes that Canada is losing out in productivity and in R and D by allowing our exports to be skewed over the last number of years from 60% value-added exports to, currently, 60% raw material exports. Being a compliant resource economy for other countries around the world is not in the best interest of our economy and certainly is not in the interest of rebuilding our manufacturing sector.

I turn quickly to the issue of investor state agreements. By definition, they are perverse, but it is interesting how different they are becoming, depending on what country we have negotiated with. It is at least important that on the Canada-Korea agreement we are being given the opportunity to vote on something. We are having a full debate in the House of Commons. On the most devastating, damaging agreement yet negotiated by any government in Canada, the Canada-China investment treaty, the so-called FIPA, we did not have debate. We did not have votes. We did not have a bill go to committee. That was because it was not a trade deal; it was an investment deal. It was a stand-alone treaty. It gives, because it has now been ratified, the People’s Republic of China the ability to bring arbitration cases against Canada for changes in our domestic legislation, whether municipally, provincially, or federally. That treaty includes no transparency whatsoever and binds us for 31 years.

At the far end of the extreme of trade agreements with an investment provision, which showed that the Government of Canada was dealing with a negotiator from another party that wanted to reduce the pernicious nature of investor state agreements, we have the new text of CETA with the EU, the comprehensive economic trade agreement. The Green Party will not be supporting CETA. However, when I read through the investor state provisions, what a revelation. It is quite different. It is night and day in terms of transparency. If the CETA goes through, for arbitration cases brought by investors from the EU against Canada or by Canadian investors against the EU, the arbitrations themselves will be open to the public. The most we can expect out of any other trade agreement, such as, in this case, the Canada-Korea free trade agreement, is that we will get public notice of the fact that these proceedings are happening at all.

That is also what occurs under most of the intermediary bilateral investment treaties that were negotiated after chapter 11 of NAFTA. Chapter 11 of NAFTA, like the Canada-China investment treaty, has no transparency whatsoever. The CETA is at the far end of the spectrum. It says that they will open up these arbitrations to the public and let people with an interest actually present evidence and participate. It is almost getting like a court as opposed to a private arbitration in a hotel room somewhere.

In the case of the Canada-Korea free trade agreement, the investor state provisions fall in the mid-range. They are not as pernicious, nor do they lock us in for 31 years, as the Canada-China agreement does. Neither are they bending over backwards to try to win over people who oppose investor state agreements. Clearly, that is the case in the European Union. They stand in opposition to CETA because of investor state agreements, at least in Germany. However, the Canada-Korea free trade agreement still includes that measures adopted by a party include municipal, provincial, federal, and local governments and non-government bodies acting with authority from local parties. In other words, we are opening up the gates once again to investor state arbitration suits that could cost us billions, this time from Korea.

Both of us in the Green Party will be voting against this treaty. I urge other members of this House who are concerned about the impacts of this treaty to join us, no matter what their party instructions are.