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Free-trade deal ’devastating’

The Daily News, Halifax

Free-trade deal ’devastating’

Pact with European countries could cost hundreds of jobs

By Robyn Young, The Canadian Press

8 June 2007

For the first time in six years, Canada has negotiated a new free-trade agreement - one which could cost the Atlantic shipbuilding industry hundreds of jobs.

Trade Minister David Emerson announced yesterday afternoon that a deal had been struck with the European Free Trade Association, made up of Iceland, Liechtenstein, Norway and Switzerland.

Irving Shipbuilding and Atlantic Towing, both owned by J.D. Irving Ltd., are concerned about the increased competition the agreement with Norway, a maritime powerhouse, will create.

"This is devastating news," said Mary Keith, spokeswoman for J.D. Irving.

"It’s just plain wrong and we would have hoped that our government would have looked out more for hardworking shipbuilders and the marine sector."

But Emerson told business leaders the agreement would expand opportunities for Canadian businesses in building materials, forest products, auto parts and agriculture.

’Back in the game’

"More importantly, this agreement is a major directional statement," he said.

"It’s a statement that Canada is back in the game."

The last free-trade agreement was with Costa Rica in 2001.

Irving has about 900 employees in the Atlantic provinces who may be affected by this new agreement, Keith said.

"Norway is not going to be paying taxes in Canada," she said.

"They’re going to come in here and they’re going to work here and they’re going back to Norway - at the expense of Canadian workers."

Keith said they’ve made several appeals to the government about the risks associated with an agreement like this and how it causes a "serious tilting of the playing field" in favour of foreign shipyards.

These appeals have gone unheard, she said.

In anticipation of a negative reaction, Emerson said the agreement includes a 15 year phase-out period on the 25 per cent Canadian duty that protects domestic shipbuilding operations and a three-year grace period before any tariff cuts begin.

"This will give the industry a significant period of time to adjust to the new market conditions," he said.

But Irving Shipbuilding and Atlantic Towing, which have active bases in Halifax, Point Tupper, Pictou, Shelburne and throughout the rest of the Atlantic provinces, feels the government has sold out on the industry.

Duty free

"Now we have the challenge of Norwegian-operated offshore supply vessels, coming in duty-free, to service our own developing offshore," Keith said.

Foreign Affairs Minister Peter MacKay announced yesterday morning that Ottawa would invest an additional $50 million over the next three years to assist the Canadian shipbuilding industry, but Keith said that is little consolation after the deals announced by Emerson yesterday afternoon.