Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 19 - Evidence - Meeting of November 19, 2014
OTTAWA, Wednesday, November 19, 2014
The Standing Senate Committee on Foreign Affairs and International Trade, to which was referred Bill C-41, An Act to implement the Free Trade Agreement between Canada and the Republic of Korea, met this day at 4:17 p.m. to give consideration to the bill.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: The Standing Senate Committee on Foreign Affairs and International Trade is continuing its study of Bill C-41, An Act to implement the Free Trade Agreement between Canada and the Republic of Korea.
In our first session we are pleased to welcome Mr. Chris Sporer, Executive Director, Seafood Producers Association of British Columbia, who is joining us by video conference. Present here in Ottawa before the committee, representing the Canadian Agri-Food Trade Alliance, we welcome Ms. Claire Citeau, Executive Director; and Mr. Phil de Kemp, Canadian Agri-Food Trade Alliance Director and President of the Malting Industry Association of Canada.
I welcome you all to the committee and our study of Bill C-41. I will take you in the order on our agenda, so I'm going to turn to you, Mr. Sporer, for opening comments. Welcome to the committee.
Chris Sporer, Executive Director, Seafood Producers Association of British Columbia: Thank you for the opportunity to present. First, I would like to apologize; I have developed a cold. I may be coughing during the presentation. Hopefully we can get through it.
As you have introduced, my name is Chris Sporer. I am the Executive Director of Seafood Producers Association of British Columbia. We are the largest organization of wild seafood processors in the province. Collectively our members purchase, process and market approximately 75 per cent of the wild salmon, herring and groundfish caught by commercial fishing vessels off the coast of B.C. Our membership is comprised of diverse business operations ranging from small family-owned businesses to medium-sized enterprises.
On the West Coast, the Pacific wild seafood industry is comprised of the commercial fishing sector and seafood processing sector. The industry in total generates $810 million in annual revenue, of which about 80 per cent is exported.
Seafood, wild and farmed, is British Columbia's largest food export commodity at almost $1 billion annually. The wild seafood industry accounts for about two thirds of that value. Our industry generates about 7,250 person-years of employment and almost $300 million in wages and benefits.
In our industry, we need some things to achieve business success that only government can provide. One of those things is access to world seafood markets. As an export industry, access to world seafood markets is critical. International agreements, such as we are discussing today, enable us to achieve that access.
The vast majority of our products comprise a small share of world supply. So our industry must compete not only with products from other world fisheries and aquaculture but also with a wide variety of protein alternatives such as beef, pork and poultry. Prices in world markets determine the prices for Canadian seafood. As a result, Canadian seafood processors, at least on the West Coast, generally have little control over the prices for their products.
Our main competitor is Alaska. Alaska harvests the same species and sells them in the same markets and in the same product form as we do. Alaska has advantages over us, particularly with respect to economies of scale that we do not have. Their fisheries are generally 5 to 10 times larger than ours. However, our industry does have some advantages over Alaska. For example, we are by and large closer to transportation hubs and therefore closer to markets. We can move product to the market more quickly, and because our fisheries are smaller, we can focus more on quality and niche markets. But to compete and succeed we have to capture that top end of the market. That's what we go for.
With respect to South Korea, it is a relatively wealthy economy that likes fish and seafood. In 2013, total Korean imports of seafood were US$3.57 billion. Until 2000, Korea was a net exporter of seafood. However, growing domestic demand and limited supplies reversed that situation. Basically we're at a point right now where they're importing almost twice as much as they're exporting.
Further, these imports are expected to continue to outpace exports ensuring that Korea will remain an important international seafood market.
Korean consumers place a high value on freshness, place of origin, taste, food safety and price in the course of making their seafood purchasing decisions. Canadian seafood products have all these attributes. Canada is viewed as a country with high-quality products, clean water and rigorous food safety standards, and that serves us well in the international market.
South Korea represents a potential niche market for Canadian Pacific wild seafood products, specialized products that will be going into niche markets. Again, we're going to try to capture the top end of the market. To do this, we need to compete on price. Right now current tariffs on the exports of seafood make us uncompetitive, particularly with Alaska.
Current tariffs on Canadian Pacific seafood products to Korea are 20 per cent to 30 per cent for salmon, halibut, sablefish, herring roe, sea urchins, sea cucumbers, geoduck, shrimp and prawns, and it's 10 per cent to 20 per cent for various groundfish species. Many of the species with the high tariffs that we see in Korea are products or species that we already sell to Japan and China — markets that have somewhat similar tastes to Korea.
As an example, the U.S.-Korea Free Trade Agreement went into effect in 2012 and is being eagerly seized upon by our Alaskan competitors. Despite the fact that total Korean imports of seafood in 2013 were 2 per cent below 2012 levels, imports of U.S. seafood products increased by 25 per cent, moving them from a market share of 4.6 per cent to 5.9 per cent. Much of this increase is directly attributable to the U.S.-Korea Free Trade Agreement. Further, the U.S. seafood industry expects the agreement to create more opportunities for their exporters. They forecast that Korean consumers will take advantage of the lower prices from the elimination of tariff duties and that demand will increase. They could see a massive increase from 2016 forward.
We know there are benefits to a free trade agreement with Korea because our Alaskan competitors are already starting to enjoy them. We cannot afford to be left behind. Reducing tariffs on seafood will open up the Korean market to high-quality Canadian seafood products. At the moment, the only species we send to Korea are skate, pollock and sardines. I should have added certain species of shrimp and prawns. Opening up opportunities for greater trade in those species and for other exports like herring roe, some salmon species, other shellfish products or underutilized species such as hagfish would be beneficial for our industry and for Canada.
Our government has recognized and acted to ensure that Canadian products remain competitive. The Canada- Korea trade agreement will help our producers fulfill their potential and expand into new markets. In our industry, we could see significant tariff reductions as soon as 2015. Tariff reductions will put us on the same track as the U.S., our Alaskan competitors, and possibly better for some species.
Under the Canada-Korea trade agreement, all South Korean tariffs on fish and seafood will be eliminated. There will be immediate tariff elimination for Pacific salmon, and almost 70 per cent of the Canadian fish and seafood products will be duty-free within five years. All the remaining duties will be eliminated within 12 years.
Our colleagues from other industries — we see them at ministers' round tables and the like — are all keen on this market. In British Columbia, Korea is a Pacific Rim country for us, and that's where many of us see our future growth. The trade agreement will be good for our industry and will translate into jobs and incomes for British Columbians.
We support the government for what it has done with the trade agreement with South Korea, just as we would support any government that opens up markets for our products. It is trade in our industry that delivers jobs and wealth for Canadians, and we hope that government continues to see well-managed agreements as a foundation for Canada's economic prosperity.
Thank you for this opportunity to make a presentation to the Standing Senate Committee on Foreign Affairs and International Trade. That concludes my opening remarks.
The Chair: Thank you, Mr. Sporer. You handled that very well. There wasn't one cough.
Mr. Sporer: I have this honey-filled drink here that is helping me out.
The Chair: Now we're turning to Canadian Agri-Food Trade Alliance.
[Translation]
Claire Citeau, Executive Director, Canadian Agri-Food Trade Alliance: I am the executive director of the Canadian Agri-food Trade Alliance, or CAFTA. I am joined today by Phil de Kemp, President of the Malting Industry Association of Canada and Director of CAFTA. Thank you for inviting us today to speak to the committee members about the Canada-Korea free trade agreement.
[English]
CAFTA is a coalition of national and regional organizations that support a more open and fair international trading environment for agriculture and agri-food. CAFTA's members include farmers, producers, processors and exporters from the major trade-dependent sectors including the beef, pork, grains, cereals, oilseeds, sugar and malt sectors. Together, CAFTA members account for 80 per cent of Canada's agriculture and agri-food exporters, realize $50 billion in exports annually, and directly employ over half a million Canadians.
We are here today to urge the committee to recognize the importance of the Canada-Korea Free Trade Agreement and the need for it to be ratified and implemented by January 1, 2015.
The importance of this agreement comes down to the impact that will be felt at home. Upon implementation, the CKFTA will be extremely beneficial for Canada's agriculture and agri-food sectors and will open the door for renewed competitive access to the South Korean market.
Right now, South Korea is a lucrative market of 50 million consumers and a central hub into the Asia-Pacific region and supply chains. South Korea imports over 70 per cent of its food, and until a few years ago, Canada was a preferred supplier for many agri-food products. In fact, in 2011 South Korea was Canada's fifth-largest export market. At that time, we exported over $1 billion in agriculture and agri-food products to South Korea. However, since then our exports have plunged by more than 50 per cent.
This massive loss in exports is directly attributed to free trade agreements that South Korea has signed with Canada's competitors, namely the European Union and the United States and, most recently, Australia.
Without a free trade agreement, Canada's agri-food exports face tariffs as high as 50 per cent, and in some cases 400 per cent. Meanwhile, our competitors have had their tariffs eliminated or phased out.
Losing the South Korean market is a major blow to Canada's agri-food sector. In fact, before the KORUS, the U.S.-Korea Free Trade Agreement, Canadian pork exports to South Korea were $233 million a year. Today they have fallen to under $80 million. Grain exports were $479 million a year. Today they are less than $100 million. Through the elimination of tariffs on over 86 per cent of agricultural tariff lines, the CKFTA will provide the level playing field that simply does not exist today.
I would like to share with you a sample of CAFTA members' projections of the benefits that are foreseen in an agreement keeping us on par with Australia and the U.S.
The Canola Council of Canada estimates that exports for canola seed and canola oil, respectively $60 million and $90 million currently, could double. The Canadian Cattlemen's Association expects to maintain meaningful trade with Korea during a transition period and expects to return to the annual $50-million range once tariffs are fully eliminated. The Grain Growers of Canada has identified duty-free wheat sales on top of the grain utilized in feed for livestock to meet the increased demand for Canadian meat. The Malting Industry Association of Canada points out that South Korea is their number four market for malt, yet current tariffs for malt are 30 per cent within quota and 513 per cent over quota. A new trade deal for this sector with Korea could result in the doubling of exports to this market that are currently set at 30,000 metric tonnes.
The Barley Council of Canada states that anticipated gains for livestock will mean a boost for feed barley, given that over 80 per cent of barley harvested goes toward feed production for livestock. The Canadian Meat Council, representing meat processors, points out that Korea is one of the most important meat importers in the world with demand exceeding $2 billion for beef and pork products annually. Once Canada's meat processors and exporters regain competitive access, it is projected that annual beef and pork exports will rebound and surpass their previous peaks.
The sugar industry, through the Canadian Sugar Institute, expects that the Canada-Korea Free Trade Agreement will provide significant opportunities for most sugar-containing products through tariff phase-outs over three to five years. The Canadian Pork Council, representing Canada's hog producers, believes that within a few short years annual exports from Canada to South Korea will recover their $400 million a year.
Taken together, we believe that CKFTA, if fully implemented by January 1, 2015, could result in over $800 million in incremental Canadian agri-food exports.
But it is really critical to have the level playing field as quickly as possible because on January 1, 2015, the next round of tariff cuts in South Korea's agreement with the U.S. will be phased in, putting further competitive pressure on Canada's agri-food interests. Canadian exporters are already suffering from the impact of Korea's deals with the U.S. and Europe, and there is a very real probability that the Korea-Australia deal will come into force on January 1, 2015.
While we have already lost ground in South Korea, we are running out of time. Every month that implementation of the CKFTA is delayed, the greater the negative impact will be for Canadian farmers, producers, processors and exporters.
In closing, the Canadian agri-food industry depends on exports. Canadian agri-food exporters need the level playing field in order to access the Korean market. CAFTA members hope and expect quick ratification and implementing legislation of the CKFTA in both countries. Thank you.
The Chair: Thank you. I do have questioners and will turn first to Senator Fortin-Duplessis.
[Translation]
Senator Fortin-Duplessis: Thank you to both witnesses for their presentations.
I am surprised to learn that our exports of products such as meat and fish have declined recently. I think it is important to implement this free trade agreement so that we can go after our share of South Korea's $2-billion export market.
According to the technical summary of the Canada-Korea FTA, all South Korean tariffs on fish and seafood products, which currently average 16.5 per cent, will be eliminated within 12 years. Are non-tariff barriers an obstacle to Canadian fish and seafood exports to South Korea? Are other agricultural products such as beef and pork subject to non-tariff barriers as well?
[English]
The Chair: Would anyone like to answer the question?
Ms. Citeau: In terms of tariffs, certain products will receive immediate duty-free access into the South Korean market, some grains, special crops, meat, oilseeds. A number of other products' tariffs will be gradually eliminated within three to five years. Some other products will take longer, over a period of 5, 7, 10, 11, 13 years, and so forth. Generally, meats take a little bit longer.
As for the non-tariff barriers, I will invite my colleague Phil de Kemp to talk about some of these.
Phil de Kemp, Canadian Agri-Food Trade Alliance Director and President of the Malting Industry Association of Canada, Canadian Agri-Food Trade Alliance: Coming from the grain side, indulge me a little bit, but as for whether it is on meat or on grains, whatever, the agreements also deal with other kinds of non-tariff barriers, if you want to call it that, such as phytosanitary certificates and things of that nature.
There are some protocols that have been negotiated and that both sides are working with for point of entry, certainly I guess on the beef products. Obviously I'm not an expert on that, but I've seen some of that stuff not with respect to Korea but with other countries on the grain side.
Our negotiators have done a very good job. We just came out of a meeting with the Market Access Secretariat today where the scope of agreements has gone in leaps and bounds compared to the old agreements that Canada put in place way back when like the Canada-U.S. or the NAFTA. It is a real tribute certainly to the negotiators and the expansion of issues that everyone deals with. It is just not on tariffs or quotas. It deals with things just coming into the fold now on sanitary and phytosanitary issues, things in the future such as low-level presence and GMO grains and what have you.
Yes, those things have been worked on and have been addressed in the agreements.
The Chair: Mr. Sporer, did you wish to comment at all on the question?
[Translation]
Senator Fortin-Duplessis: The non-tariff barriers with respect to fish, seafood, shellfish and so forth.
[English]
Mr. Sporer: I can speak to that. We heard from our colleagues there, for example, that the agreement has a framework for dealing with non-tariff barriers. With respect to seafood, that's our experience.
Seafood has been exported worldwide for years, so our exporters are very adept at working around those things. But, our experience with trade agreements is that they provide, at the very least, a framework to deal with any non- tariff barriers. From our membership, we have not heard anything that they see that hasn't been dealt with or that is a serious issue with this agreement.
I think the non-tariff barriers have been dealt with within the framework.
[Translation]
Senator Fortin-Duplessis: I have another question. In light of the provisions in the Canada-Korea FTA, are there barriers that would continue to have a negative impact on Canadian trade and investment activities? Are there barriers in any sector, be it fisheries or services, that will persist because the free trade agreement does not address them?
[English]
Ms. Citeau: In broad terms, I think once the agreement is implemented and ratified — it takes time to develop a market, and I think that because there has been a massive loss in exports, it will require extra work for the sector. However, both countries have been working on an agreement, and I believe the relationships, for the most part, have been maintained. There's been significant communication on the business side between Canada and Korea so that the relationships are still there. They are ready to start doing business again, hopefully, once the agreement is ratified.
[Translation]
Senator Fortin-Duplessis: So you have a very positive view of the free trade agreement and do not expect any unforeseen barriers to arise. Is that correct?
Ms. Citeau: Overall, a very positive view, yes.
Senator Verner: My question pertains more to the agri-food sector, so it will be for you, Ms. Citeau. As a senator from Quebec, I have heard a lot about the impact that South Korea's recent agreements with the U.S. and the European Union will have on Quebec's pork exporters.
Does your organization represent Quebec? Does the Canadian Agri-Food Trade Alliance have members in Quebec?
Ms. Citeau: The Canadian Agri-Food Trade Alliance's membership is primarily made up of national associations that represent producers in every province, including Quebec.
Senator Verner: As you mentioned, Canada has lost ground and fallen behind because of the agreements South Korea signed with both the U.S. and the European Union. I see you are convinced that we can make up that ground. I asked the minister about this yesterday, and he talked about the Global Markets Action Plan, launched in 2013, I believe.
The action plan contained measures to help various producers. I was asking the minister about Quebec's pork industry. My understanding is that you do not think additional measures will be needed to promote exports and benefit from the agreement with South Korea. Is that correct?
[English]
Mr. de Kemp: The Canadian Pork Council is one of the members of CAFTA. They have been there since the beginning, just before the WTO negotiations. Most or a lot of the trading for some of the international arm of Canada Pork International is based out of Montreal with Jacques Pomerleau's group. Quebec is somewhere in the range of what I believe is at least over 40 per cent of the national pork production. I know some of the discussions that were had around the board table from the members, and certainly a member at the table at the time was from Quebec. He painted a very bleak picture, and we saw that over the last three or four years with the plummeting sales. Provincially, in Quebec, in exports in pork, they are going to do very well.
As for nailing down volumes and what have you, like I said, we just came out of a Market Access Secretariat meeting, and the beef and the pork have had that track record before. Those partnerships and relationships have been there a long time. Our industry, the malt and buying malting barley from producers to make malt to the beer companies, we started from scratch 25 years ago. We have a very good working relationship with both our importers and our brewers. We've been working very closely with them, prior to the agreement, and hopefully now as we see this going forward.
Certainly as Claire indicated, we are going to double ourselves. We are able to maintain our export share there, even though we've had some other agreements in place by the Europeans and the Americans, but there are different reasons for that. Are there going to be any hiccups? The only hiccup would be if we don't get this signed within 30 days so we can have January 1 implementation. I think everyone is prepared. Everyone has been travelling to Korea quite a bit in the last 12 months, including with the minister, and I was also there in April. The sectors that sit around the table from CAFTA are absolutely ready to go.
Senator Housakos: Can the panel share with us and outline for us which nations would be our steepest competition in South Korea, in the area that you represent? What advantages or disadvantages would they have compared to the current market situation? In your opinion, will this agreement be able to make up for some of the disadvantages that the Canadian sector companies have had in the area?
Also, could you comment on the fact that the EU and the U.S. seem to have come to arrangements with South Korea more quickly than we did? It seems that we took an unusually long time to get this agreement nailed down. Is that an inherent problem that we have and some ground that we have to make up? What suggestions would you have for what more we can do to help your sectors and your industry make up this ground, if there is ground to be made up, above and beyond this solid trade agreement?
Mr. de Kemp: That is a great question. First of all, we should acknowledge our trade negotiators on this. Obviously, yes, we are technically behind the eight ball in negotiations with respect to the U.S and the European implementation and with the Australian deal was announced some time before Canada concluded.
It was really good to see — and kudos to the government and to our negotiators — the ability to have an agreement that either sunsetted at the same time or sunsetted ahead of some of the agreements that are in place. The U.S. and the Europeans were 15-year agreements with a sunset. Depending on the commodity, with our agreements, whether on beef, pork, malt or what have you, some of those sunsets are in 12 years. I can speak to the Australian one on malt, which is 15 or 14 years. We're going to have a two-year leg up, and they have 75 per cent of the market. We did very well on malt and malting barley for farmers. The sunsets, depending on the commodity, will vary, but it will be equal to or better than, depending whether it's U.S., EU or Australia.
With respect to your question on quotas or percentages, it made a big difference. You're giving a quota allocation to the U.S., whether on beef or pork, and you don't have it here in Canada. If you have a 30 per cent tariff, that's going to hurt. If you've been branding on quality, you can only hold on to so much of that market. Some of that is going to slip, and that's what has happened here. You can only hold so much for so long before they say, ''That price difference is hurting, and our consumers can't take that just yet.''
The tariffs and quotas are different, depending on commodity. The sunsets are as good if not better, depending on the country, and that is a real kudo to this government and their trade negotiators.
Mr. Sporer: It is good for our industry as well. Our negotiators have done a very good job to put us on the same track as our Alaskan competitors. They are our big competition. We will be on the same track as the U.S., and in some species we will do better. We are merging in, and we will be able to remain competitive because the government and negotiators recognized that and worked towards that.
The Chair: As a question to the panel before us and Mr. Sporer by video conference: You're obviously very positive about this agreement and the opportunities that you're going to have within Korea. Do you foresee that being in the Korean market in a more positive way would give you the ability to then move to other markets within the Asia area, or is it solely within the Korean market where you anticipate your gains?
Mr. Sporer: We see this as a first trade agreement with a Pacific Rim country, and Canada is really getting its foot in the door there. We do a lot of trade with Japan, and there are discussions about trade agreements with Japan and the like. We see this as a positive step in general for the whole region. We have the Trans-Pacific Partnerships going on. We see it hopefully not stopping with Korea but expanding beyond that because those markets are already very important to us, and trade agreements will provide even more benefit.
The Chair: If you get into the Korean market more strongly, will you have partnerships and therefore be able to transport and find new markets with perhaps Korean businesses or directly from your own staging from there?
Mr. Sporer: You could see a bit of both of those. We see in some of our markets that we will put product into a country like Japan and it could end up in another country, or vice versa, so a lot of it is direct. It depends on the product type and the circumstances and the price, but overall I think it will open up a whole bunch of different opportunities for that type of arrangement to emerge.
Ms. Citeau: To answer your question, South Korea acts as a central hub to supply chains in Asia, so yes, it's important because of the importance of the South Korean market but also because it acts as a central entry point into other markets in Asia.
The Chair: I see no further questioners so, on behalf of the committee, I thank you for contributing your varying perspectives to our study of Bill C-41. We will continue to study the bill and obviously follow it in our continuing foreign policy study to determine whether the expectations of the trade agreement are met.
Our next panel has some difficulty in that Ms. Joy Nott, President of I.E.Canada, the Canadian Association of Importers and Exporters, was to be here by video conference. We understand there is a storm in Mississauga and therefore a difficulty of making it to the place where the video conference would be held. We have elected to go with the witness who is here before us. I may have to interrupt to introduce Ms. Nott, but we will proceed to the extent that we can.
We are very pleased that Mr. John Masswohl, Director of Government and International Relations of the Canadian Cattlemen's Association, is here in person. Welcome to the committee. We await your opening comments and will then go to questions.
John Masswohl, Director of Government and International Relations, Canadian Cattlemen's Association: Thank you, Madam Chair, for the opportunity to appear before the committee and for the committee's interest in this important bill, Bill C-41, to implement the Canada-Korea Free Trade Agreement.
I was going to begin with some general comments about international trade and what that means for Canadian beef cattle producers. My comments might be familiar to some of the senators who heard it yesterday in the Agriculture Committee. However, then I will focus more specifically on Korea and the Canada-Korea Free Trade Agreement.
Access to international markets and the ability to export is truly the lifeblood of the Canadian beef sector. We sell our finished cattle to beef packers and they disassemble them and sell each of the pieces. Without international trade, Canadian beef packers cannot maximize the value per carcass, and that means they cannot maximize the amount they pay cattle producers to buy our cattle.
So we are all familiar with steaks and roasts and hamburgers, and we know how popular those products are here in Canada. Unfortunately, a lot of Canadians aren't going to the meat counters looking for things like livers and kidneys and lungs and a number of the other products that are in a carcass. Those items need to go somewhere to add value for Canadian producers.
If I would take a beef tongue, for example, maybe a beef tongue is worth about 40 cents, 50 cents a pound wholesale in Canada, and a beef tongue weighs about 6 pounds and is worth, in the Japanese market, in some Asian markets, $5 to $6 a pound. On that one item alone, international trade is worth more than an extra $30 per animal. You can repeat that example for a number of the other pieces in the carcass.
Even for some of the popular cuts, like rib-eyes and tenderloins, often we can sell them for more money in places like Japan and Korea, even the United States, more money than we get for those in Canada.
With that thinking, the Canada-Korea Free Trade Agreement is going to be extremely beneficial for Canadian beef cattle producers by enabling our packer customers to get each of those pieces into the Korean market on a competitive basis. So the Canadian Cattlemen's Association urges quick passage of Bill C-41. We are looking for the Canada- Korea Free Trade Agreement to be implemented as quickly as possible, and indeed we need it to be implemented no later than January 1, 2015.
Currently, Canadian beef, both fresh and frozen beef, pays a 40 per cent tariff when imported into Korea. American beef pays a 32 per cent tariff.
Every year on January 1, the Korean tariff on American beef drops another fifteenth of 40 per cent, and that works out to about 2.7 per cent per year. Without the Canada-Korea Free Trade Agreement, six weeks from now, the Americans are going to get another tariff cut and the tariff disadvantage for Canadian beef is going to increase from 8 per cent to 10.7 per cent. That's if we do not implement the Canada-Korea Free Trade Agreement.
Under the terms of the Canada-Korea Free Trade Agreement, Korea will eliminate that 40 per cent tariff on Canadian fresh and frozen beef in 15 equal annual steps. That's the same pace as Korea is eliminating the tariff on U.S. beef. The Americans will get their annual cut on January 1, every year. We will get our annual cut for Canadian beef on the anniversary of when the agreement comes into force.
That's why the date of January 1 is very important to us. If we have it implemented on January 1, we're going to maintain that constant pace with the Americans until we eventually catch up and we both get to duty-free access into the Korean market.
If the parliamentary ratification process misses January 1, maybe we get it sometime later in January or February, then every year through that 15-year phase-out period we're going to have some period of time at the beginning of the year where we have a wider tariff differential, and that means during that time every year we probably will not ship very much.
The text of the agreement says it comes into force 30 days after both countries have completed the domestic legislative process, so we're looking for Royal Assent in Canada rather quickly, in days not weeks.
In addition to the beef cuts, what I was talking about on the 40 per cent, that's beef muscle cuts, things like steaks and roasts, but the Korean market is also important for those organ meats. We call them collectively offal. The Korean tariff for beef offal is 18 per cent, and for Canada this will be fully eliminated in 11 equal annual steps, and I would note that that phase-out is faster than the Americans are getting under their free trade agreement. Not only will we catch up to the Americans, we will have a few years of tariff advantage over the United States on the beef offal.
Before I conclude the comments at the beginning, I will just provide a few statistics on beef trade with Korea. In 2002, we exported nearly $50 million worth of beef to Korea, so that's 2002, 12 years ago. From May 2003 until February 2012, so for nearly nine years, Canadian beef was prohibited in Korea so we shipped nothing. In 2012, once we regained that access, for the 10 months we did export 2,247 tonnes of beef for $10 million, and that was the year the Americans implemented their free trade agreement and we were at a 2.7 per cent tariff differential. For 2013, that tariff differential grew to 5.4 per cent, and our exports dropped to 1,166 tonnes for $7.8 million.
This year, the tariff differential has grown again to 8 per cent, and from January through July we exported only 807 tonnes for $7 million.
You can see over that progression, the dollars per kilo of what we were exporting is rising. We obtained $4.47 per kilo in 2012 and this year we're up to $8.70 per kilo. The reason is partly because there's a global reduction in the beef supply and prices generally are rising around the world. But it is also because of that growing tariff differential disadvantage with Korea. We are uncompetitive at the low end of the market for frozen beef and bones, but we have maintained meaningful shipments at the high end of the market.
Our assessment is that by keeping the tariff differential constant at 8 per cent through the transition period, we're going to maintain meaningful trade with Korea, and once the tariff is eliminated we would expect to be back at around the annual $50 million range and probably grow beyond that.
That concludes my opening statement, and I would be pleased to take comments or questions.
Senator Downe: I am not that familiar with the Korean market. Do they export anything to Canada?
Mr. Masswohl: They do not export any beef to Canada, maybe a few pounds here and there. I tasted Korean beef one time in Canada, and it was at a special tasting event. They do produce very excellent beef. They have a special breed, if you are familiar with Japanese beef and how it marbles. It's excellent beef in Korea. It is some of the most expensive beef in the world, and it is simply not price competitive for the main commodity market in Canada. There may be some very high-end restaurants that import a few.
Senator Downe: Most of the beef they produce is consumed locally.
Mr. Masswohl: Correct, yes. Or sold in Japan.
Senator Downe: You mentioned the United States and the Australians, but others must be competitors as well.
Mr. Masswohl: Yes. Those are the main four exporters to the Korean market. In order, it would be Australia first, the United States second, New Zealand and Canada.
Senator Downe: What are the Australian tariffs compared to the Americans? Do you know those?
Mr. Masswohl: They're the same as we are. They also pay 40 per cent. Australia has also negotiated a free trade agreement with Korea. Both the Canada-Korea and the Australia-Korea free trade agreements are going through the Korean National Assembly together, so we believe that both Canada and Australia will get our first tariff cut on January 1. That is what we're both hoping for.
[Translation]
Senator Fortin-Duplessis: Welcome, Mr. Masswohl. My question will be short. Do you think the Canada-Korea FTA will eliminate all measures restricting Canadian beef products?
[English]
Mr. Masswohl: Right now, we are able to export beef from cattle under 30 months of age, whether it is bone-in or boneless, fresh or frozen. That is really what we need.
We do not have access for beef for cattle over 30 months of age, but we don't believe that Korea is a significant market for the over 30-month beef. We have had access restored since February 2012, and we're satisfied with the technical access that we have. The issue remaining for us is the tariff.
[Translation]
Senator Fortin-Duplessis: Will the free trade agreement enable you to recover your share of the South Korean market?
[English]
Mr. Masswohl: The way we see it is that on implementation of the agreement, we will be assured we won't fall further behind the Americans on the tariff differential, and that is going to create certainty for the Korean importer. It was unfortunate that as we restored our access to Korea, it was within a few weeks of the Americans gaining that first tariff differential. That set the signal to Korean importers to perhaps not invest the energy in re-establishing a relationship with Canada until Canada gets the free trade agreement.
We believe that now that we will have that certainty, we can focus our promotion efforts at getting back into that Korean market and building that market share back up.
The Chair: You're saying that if we eliminate the tariffs January 1, we will be doing it at the same time as the Australians.
Mr. Masswohl: Correct.
The Chair: You have given us some statistics of what you think the gains will be for your industry. Is that based on what you believe you will be able to sell? And you will therefore be competing strongly with the Australians, who have had a traditional market in there somewhat longer than what we have. What gives you the optimism that you are going to be achieving the gains that you have estimated?
Mr. Masswohl: Yes, on competition with Australia, it is absolutely the largest exporter of beef into the Korean marketplace. Australian beef is quite a bit different from Canadian beef. It is cheaper, different breeds of cattle; they have more of a grass-fed product. We have a grain-fed product. We tend not to compete with Australia on price. We compete on quality.
So we're looking at a different segment of the market in Korea for our beef. We would be concerned, as we have been concerned with the Americans. We're more comparable to the type of beef that the United States exports, but we would be concerned with Australia getting farther ahead of us as a cost advantage if they implemented their free trade agreement and Canada did not. Being able to compete on an equal basis with them, we're not concerned.
Where it becomes a little more price-sensitive is on those organ meats, the offal. There's a particular Korean barbecue product in which the main meat ingredient is one of the stomachs of the cow. It is very popular in Korea, and it is more price-sensitive because you can't say this is a better stomach than that one, so to speak. On a product like that, we're very concerned about the tariff differential.
The Chair: Actually, I think you can. Tripe is tripe is tripe — no. It is very different.
Following up on that comment, you feel comfortable with Australia and that you can compete. What makes you think there is that much growth in the Korean market? Obviously they're getting beef from where they can; it is price- sensitive. I understand that. But for you to achieve and the Australians to achieve, there has to be a real growth in the beef market.
Mr. Masswohl: Right, and that's a great question. One of the things that give us such confidence is that we know at what level we have been able to perform in that market in the past.
Back in 2002, as I mentioned before, with the BSE trade restrictions we were able to export $50 million worth of product. Prices are quite a bit higher today than they were then, so that's why we could recover, at a minimum, the market share that previously existed once we can get rid of these tariff disadvantages. We think there's room to grow beyond that as well.
One thing that seems to repeat itself in many markets is that as people's disposable income grows — and as markets develop from being more of a developing market in the past to having more of a middle class and wealthier class — people move up that income chain and they tend to consume more beef. In some areas, it's a luxury item. Sometimes it is because of the infrastructure of retail and refrigeration, and people having refrigeration in their homes. In countries where refrigeration at home isn't common, the meats they eat tend to be smaller animals, such as pork, chicken, fish, things that you buy and eat, and you don't have leftovers.
Those basic overall economic factors are very positive for our sector.
The Chair: Thank you.
Ms. Nott, can you hear me?
Joy Nott, President, I.E.Canada, Canadian Association of Importers and Exporters: Yes, I can. Can you hear me?
The Chair: Yes, thank you. We knew that you were having difficulty due to weather, so we elected to start. I'm going to finish with our other witness with one final question, and then we'll turn to you. With a little patience, we can accomplish both.
Ms. Nott: That's perfect. My apologies.
The Chair: It was not within your control, I'm sure. We appreciate that.
Senator Downe: I'm wondering about the cattle. You don't ship any live cattle to Korea.
Mr. Masswohl: Not to Korea.
Senator Downe: Are most of the beef products you ship from a particular part of Canada closer to Korea, like Western Canada, or are they from across Canada?
Mr. Masswohl: To be exported, the beef has to be processed in a federally inspected packing plant slaughterhouse. The two largest facilities in Canada are both in Alberta. They each have capacity for a little bit under 5,000 head per day. The next largest one in Canada is in Guelph, Ontario, and they have a capacity of about 2,000 head per day. Then there are about half a dozen other smaller ones across the country. There is one in P.E.I. and a couple more in Ontario. That's about it. There isn't one in B.C., Saskatchewan or Manitoba.
Senator Downe: You mentioned ''federally inspected.'' Do the Korean officials come over to inspect the plants themselves?
Mr. Masswohl: They did have to. When the market reopened, they lifted the restrictions. They came and did an inspection mission of the packing plants basically to see that the Canadian federal inspection system was what it was purported to be. They were satisfied with that. I'm not sure if Korea does it, but some countries reserve the right to audit the system from time to time. For example, the United States audits every year, and we audit the American system every year. With some other countries it's a little less frequent, but we would expect probably from time to time they would come and audit the system.
Senator Downe: When the fresh product leaves Canada and goes to Korea, and the frozen, for that matter, do we have any inspection from our end at the Korean companies to maintain the quality and standard?
Mr. Masswohl: We do not.
Senator Downe: Thank you.
The Chair: Mr. Masswohl, you've covered the area enthusiastically and answered all our questions. Thank you for coming and putting forward your point of view on this bill and the free trade agreement with Korea. We appreciate your input. I learned a little bit about sales, and that's very helpful given the region I come from. Thank you for being before us.
Mr. Masswohl: It was my pleasure. Thank you very much.
The Chair: We will now turn to Ms. Joy Nott, President of I.E.Canada, the Canadian Association of Importers and Exporters. We appreciate the difficulty you had. We are eagerly awaiting your opening remarks, and then we will go to questions. Welcome to the committee.
Ms. Nott: Thank you very much, Senator Andreychuk.
Again, my name is Joy Nott and I'm the President and CEO of the Canadian Association of Importers and Exporters, otherwise known as I.E.Canada. I.E.Canada has been in existence for a little over 80 years — 82 years. Our members employ about 1.6 million Canadians and, on an annual basis, contribute about $270 billion to the Canadian economy.
Unlike other trade associations, I.E.Canada represents importers and exporters from a vast array of different industry sectors. For example, we have members from automotive. We have food processing plants. We have distributors. We have retailers. We have small to medium-sized companies. We have large multinationals. When you look at the makeup of our members, we cover almost every industry sector in Canada that deals with tangible products that are being imported and exported. Our association is national. We have members in all 10 provinces. That's a footprint as to what I.E.Canada is.
I'm sure you can imagine by the very name of our association that I.E. Canada has traditionally and has always been and continues to be in this instance very much pro-trade. We were very much at the onset of this 10 years ago and the discussions with Korea 10 years ago. We were there encouraging those free trade agreements to move forward. We are thrilled to see that the negotiations have concluded and that we are at this point in the process now of potentially seeing the realization of a free trade agreement with South Korea.
We feel a free trade agreement with South Korea will benefit the Canadian economy on a number of different levels. There are too many for me to go into. The previous witness represented a specific industry line. However, I would be happy to answer any questions anyone may have. The reasons our members are so uniform in their comments to us at I.E.Canada about how much they want the free trade agreement between Canada and Korea to move forward are based on a number of different things.
For starters, I'm sure you all know the United States has a free trade agreement currently with Korea. Since the 1940s and 1950s, especially since the Korean police action in the 1950s, Canada and Korea have had a great commercial relationship. As a result of that, many relationships were forged at that time for products that have since that time been exported from Canada to Korea. In the past three years, some industry sectors, beef most notably, have lost traction because the Americans gained an advantage over Canada. Ultimately, at the end of the day, when it was hard to distinguish quality between American and Canadian and there was a price differential, some of those long- standing relationships between Canada and Korea started going in favour of the United States.
We're very much hoping to gain back areas that we've lost. All my members who have been negatively impacted because of the U.S. lead on us in this particular area feel that they can compete from a quality standpoint and on all other areas, and the only thing that was putting them behind the eight ball was the difference in tariffs. They're very much looking forward to that ground being level again.
The other thing may not be quite so obvious. I don't know if anyone has testified on this particular point before. Another main reason my members were very interested, even members who are not today dealing with South Korea specifically as a market, and one of the reasons why they very much would like to see this free trade agreement move ahead is the fact that it comes as news to no one that the Asian market is obviously a very lucrative market, and that will only become more and more true as the years and decades move on. As Canadians, when you look at Asia, Asia overall is a very formidable market. It is, however, fraught with commercial risk. If you're going to be a small to medium-sized company, and even to some extent a large multinational, you have to go into that market with your eyes open.
Traditional soft landing places, for example, like Hong Kong, are still viewed favourably, but given the recent events in Hong Kong with the pro-democracy demonstrations and some of the geopolitical events in Hong Kong, it's not that Canadian exporters or Canadian businesses overall have crossed Hong Kong off the list, but, like all prudent business people, geopolitical risk feeds into risk matrices that companies look at when they make decisions about what markets they are going to invest in and have a footprint in versus those that they'll export to but won't necessarily put offices and staff in. That is not to specifically point to Hong Kong as something negative or whatever, but it's just a reality of the ever-changing landscape geopolitically that's happening today. The same could be said for some of the actions happening right now with Russia and the Ukraine, and up until not all that long ago Russia was seen as a really strategic market to try and break into.
Geopolitical risk is very real. Traditionally Hong Kong has been the soft landing spot for Canadians. You have the link to the British Commonwealth. There is a long history of good relations between Hong Kong and Canada. There's a large Hong Kong population here in Canada. There is rule of law. The whole familiarity of dealing with Hong Kong has been there for a long time. It's not eroding; however, there are people who are watching what's happening there, and South Korea would be another soft landing spot if we had another place in Asia. Should something go wrong, ultimately, with Hong Kong over all, Asia would be another soft landing spot for Canada, if we had a free trade agreement.
All of that being said, concerns have been raised by my members. They've been very clear with me that the message is uniform. I haven't had anybody say to me that they don't want this to go forward. The concerns they have are just in watching what has happened between the United States and South Korea with their free trade agreement and trying to learn lessons from the American experience.
The U.S. relations with South Korea are good, but they are different than the Canadian relations with South Korea. Canada and the United States, there are differences between us; I'm sure I don't need to tell you that. When we look at the U.S. experience in dealing with South Korea, there have been many instances where American companies have tried to take advantage of the U.S.-Korea Free Trade Agreement, and the Koreans have pushed back, questioning things like the origin of products and the origin of ingredients and the origin questioning paperwork and really pushing back and sort of using the levers within the free trade agreement to challenge the authenticity of whether or not a particular product qualifies for the U.S.-Korea Free Trade Agreement.
Given the fact that our two supply chains, meaning Canada and the United States, are so closely integrated — that is our economic reality — one of the concerns my members have raised is that they're wondering and hoping that in our experience with the Koreans, if we start to see signs that the South Koreans are questioning a Canadian product as potentially not qualifying because it has too much U.S. content, just as an example, and are questioning the origin of parts or materials or ingredients, we would have the political and bureaucratic wherewithal to have learned from the U.S. lessons so that we could approach those questions and concerns early on and maybe not go as far down that path as some industry sectors in the United States are now finding themselves with the Koreans.
Overall, in conclusion, the fact that duties will come down between Canada and Korea should this free trade agreement move forward is obviously a good thing, but it's not necessarily the only thing that our members are looking at. They're looking at soft landing spaces within Asia, places that they can use as a platform to enter into other Asian markets, of course predominantly China, but having a friendly place to land is paramount. The fact that duty rates come down of course means more to some of my members than it does to others, but those I'd say are the two main tenets.
Overall, I don't know what else to tell you, other than it's uniform and unanimous amongst my members. Not only are they looking forward to it, but some more than others have time sensitivities; they're really hoping this becomes enacted sooner rather than later.
With that, I welcome any questions you may have for me.
The Chair: Thank you, Ms. Nott. I will start with one question. You indicated lessons learned from the U.S. Your members are hoping that they can learn from that and avoid some of the issues. Would you agree that no free trade agreement is devoid of those kinds of issues, that a free trade agreement still has to take into account that both sides will try to maximize their advantages, sometimes perhaps appropriately and sometimes inappropriately? It is an ongoing struggle.
Ms. Nott: Agreed. Totally agreed, and our members are seasoned importers and exporters. They are familiar with free trade agreements. Most of them are very familiar with NAFTA; they're familiar with the Canada-Chile Free Trade Agreement, Canada-Israel, Canada-Peru. They do have experience with free trade agreements, and what they're hoping is that the experience with South Korea will be the same as their experience with other free trade agreements.
The United States has faced some real challenges with the Koreans, and there is nothing to say that Canada will experience those same challenges. The only thing that my members are concerned about is that, given the fact that the United States has had some of these challenges, we, as traders and as the commercial entity, and we as the Canadian government, be conscious of that, and the minute that we start to see that there could be anything that would indicate that we're heading down that path, maybe given that we're forewarned, we handle it maybe a little bit differently at times than the Americans did.
Senator Downe: I would like to follow up on the chair's question. These concerns that your members have about what happened to the American companies, have they done a study about this, or how have they found out about these concerns? Are some of these companies you represent also working in the United States, or what source have they heard it from?
Ms. Nott: Great question and thank you for that question.
The answer is yes to both of your assumptions. We have members that are multinationals that have divisions both in Canada and in the United States, so the sister company in the United States is already, for example, dealing with South Korea through KORUS, the Korean-U.S. agreement, and sort of passing stories north, so to speak, to tell their sister company in Canada to be aware of this, that or whatever, based on their experience.
The world of international trade is a very large community, yet it's a very small community. When you start dealing with transportation companies and freight forwarders and customs brokers and international trade consultants, the experience that happens in one section of the globe, stories and experiences very quickly make their way around. It's a small community. The stories are heard in countries like Canada.
It's not so much that we anticipate having problems, because we somehow think that Canada's relationship with South Korea will likely mean that we probably may not face all the same challenges the Americans did. That being said, the conservative stance is to say, ''Let's not be shocked if these things start to happen and let's just proactively have the mechanisms in place to engage the Koreans in a positive way so that any issues that do start to arise are dealt with as quickly as conceivably possible.''
Senator Downe: Thank you for that. I'm not sure that we can claim Canada may have a better relationship. I would be quite concerned about this given the fact the Americans have so many troops in South Korea helping defend their country. I think the Koreans very much appreciate the contribution Canadians made in the Korean War, but the Americans made a contribution as well and continue to make to defence and security of their nation, a primary concern.
I know the automobile industry, for example, has complained that there have been Korean actions on the tint in the windows of the cars, the remote control starters, where the parts come from. There have been complaints that the government then uses their tax audits, for example, as another way of slowing down business. These are the type of concerns your members have as well?
Ms. Nott: Yes, we do have members in the automotive industry. The parent companies in this case, the automotive parents, are in the United States and have relayed their concerns and experiences to the Canadian subsidiaries, so there is no lack of understanding in the automotive industry specifically about what some of the challenges have been in dealing with South Korea when talking about automotive.
Like everything else, the automotive industry is very large and strategic, and what our members are most concerned with is that the experiences of the automotive — it's obvious why there is more manoeuvring around in that sector. It's big dollars, it's a lot of jobs, and it's very important to both economies, so of course that will be a main focus point. But members want to ensure that the sort of sentiment of using tax audits and challenging things doesn't become our normal everyday way of engaging as two economies.
You will always have potential locking of horns when it comes to certain industry sectors. Our members are concerned and we want to make sure that we nip in the bud anything that would imply that this kind of interaction with each other would start to spread.
For example, it's a tit-for-tat kind of thing. If that's what you're going to do for me in automotive, then this is what I am going to do for you in beef. I'm just saying that colloquially, but I think you know what I mean — that we don't get into a sparring match, that we consciously agree to begin with that there is a chance that it might happen and that we stick to a positive tact and try in a positive way to engage the Koreans.
I don't disagree with what you said about the Americans being there. What I can say having travelled to Seoul is that the perceptions between governments and the perceptions between business people are often slightly different. For example, I'm not going to say that Korea does not have a positive image of the United States. They do have a positive image of the United States. I think they have a very positive image of Canada and Canadian business people. Governments, military support and things like that, that's one thing. Dealing business-wise, I know that they view Canada very favourably.
Senator Downe: That's great to hear. Are any of your members concerned that there is no snap-back provision, as they call it? The U.S. trade agreement has this, which is if there is continuing trouble with these issues, then the Americans can automatically put back the tariffs. This is absent from the Canadian agreement.
Ms. Nott: Honestly, no. That has been discussed because that is obviously a major difference between the Canadian agreement and the U.S. one. I wouldn't say there is any sort of concern, simply because, I think, Canadians recognize the fact that our economy is not what the U.S. economy is. To engage somebody like the South Koreans, who quite frankly are becoming an international superstar in the way of international trade — you only have to look at some of their major brands to recognize how fast they've grown, how big and influential they've become over a short period of time — to engage and plug into those supply chains, as the Canadian economy, and the size that we are, no, it's not a risk. We have to strategically play the game at times, somewhat differently than the Americans, and not having a snap- back is not seen as being a negative to the Canadian deal.
Senator Housakos: We've clearly heard tonight plenty about beef, pork, seafood and wheat. Are there any other sectors that will benefit from this agreement, and to what degree, especially in the service industry and financial sectors and Canadian companies that are involved in environmental and extraction of energy and resource-based economy activities in South Korea? Could you highlight for us some of the opportunities that we have heard of so far that might be available for Canadian enterprises due to this agreement?
As well, have your members sufficiently tapped into the people-to-people connections between Canada and South Korea and utilized that wealth and resource that we have at our fingertips in this country where we have a lot of Canadians of Korean background who can serve as solid conduits between the two economies?
Ms. Nott: In answer to your first question, specific opportunities, because we have so many members from literately every industry sector, it is difficult to zoom in on one. The kinds of comments we are hearing, especially from our medium-sized — the multinationals are all ready for the most part. If they have an interest in Korea, they are already there, when you talk about large, multinational companies. So, I will put them aside because I don't I think there is anything there that I can add to the conversation.
Small companies are looking at the opportunity, both from a services and a goods perspective, as a less intimidating place to land than, let's say, going straight into China. I'm hearing that from companies from everything from distributors of goods to service providers such as software programmers and that sort of thing.
A lot of attention has been paid to the supply chains that have been created coming out of South Korea, going back more than a decade, back before the time that we've been in negotiations with them for a free trade agreement. Companies like Samsung, Kia, LG and the number of large companies that have surfaced in Korea that then have large supply chains affiliated with them have attracted all kinds of different Canadian companies to recognize the opportunity to plug into those supply chains.
If you think of a company like Samsung, then you think high tech. The opportunity is there, and I know that these opportunities are something that the Canadian commercial marketplace has been looking at for a long time. If you're any sort of an IT programmer, with some sort of specific twist that you've created that can add to the television/ computer monitor-type thing, then you're looking at the Samsungs and the LGs because they are large players, along with the Japanese, meaning Sony and Toshiba.
To give you specific examples would be harder for me. I can't think of any of my members who don't view some sort of opportunity in Korea. They're developing. They have a high standard of living compared to other places in Asia, and they're high consumers of goods overall. It's really what couldn't you do, if you had a mind to do, in South Korea?
I'm sorry, what was the second part to your question?
Senator Housakos: If we've capitalized enough on the people-to-people connection.
Ms. Nott: For the people-to-people connection, I can be honest with you, I would say the large multinationals, yes, of course. Medium-sized, I'm going to say yes, there is a good track record. If the deal goes through then it will only increase. I'm going to be honest with you in that small Canadian companies — I'm not so convinced that they've taken as much advantage as they could otherwise for the people-to-people connection. I think a lot of that spawns from the fact that once you drop down to smaller-sized Canadian enterprises, they are unfamiliar with the fact that things like the Canadian Trade Commissioner Service exist. That's the issue, more so, than the small companies not wanting to engage person to person with Koreans. They are not familiar with the tools that are available to them through the Canadian government. It becomes an education for the smaller companies. The medium-sized companies tend to be aware of the tools, and I think once the deal is in place, that's when you are going to get a higher commitment to engage.
[Translation]
Senator Fortin-Duplessis: On your website, I read that you went to South Korea with the Prime Minister to sign the agreement. I must confess that I am jealous that you had the opportunity to go. My question is this. Are your members satisfied with the dispute-settlement process to address issues that may arise in the course of doing business with South Korea?
[English]
Ms. Nott: The general answer to that is yes. That is definitely something in all free trade agreements. Dispute resolutions and proposed methodologies for dispute resolutions are of great interest to the community over all. Specifically for Korea, I would say it was looked at more closely than it normally is because of the stories that have come out of the United States about some issues that the Americans have had. I know that it has been something that's been looked at. None of our members had anything negative to say. Like all trade agreements, you always have people who say this could have been slightly tighter or that could maybe have been a little bit better. But overall, when you ask them if they are satisfied with it, nobody felt that it didn't meet at least the minimum thresholds. They were all nodding, saying yes, we can live with this.
Senator Fortin-Duplessis: Thanks very much.
The Chair: Ms. Nott, I think you have answered all of our questions this evening. Thank you for your great knowledge from the exporters and importers that you represent. Thank you for taking the risk to come in the bad weather. We thank you for your evidence, and we wish you a safe return. Hopefully the weather has improved.
Senators, we will reconvene tomorrow at 10:30.
(The committee adjourned.)