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S. Korean trade deal will cost jobs: CAW

Globe and Mail, Toronto

S. Korean trade deal will cost jobs: CAW

Ottawa’s own study shows mild impact

Steven Chase and Greg Keenan

20 September 2006

OTTAWA, TORONTO — A free-trade deal Ottawa is negotiating with South Korea could cost Canada up to 33,000 jobs — including 4,000 in the auto industry — this country’s largest private sector union warned yesterday.

The charge triggered a public relations battle of duelling forecasts as Ottawa released its own studies showing a relatively mild impact on light-vehicle production in Canada.

In an Ottawa meeting yesterday, Canadian Auto Workers union president Buzz Hargrove pressed International Trade Minister David Emerson to shelve talks with South Korea because North American vehicle makers are already fighting for survival.

"It makes no sense at all for the Canadian government to be pushing for a free-trade agreement with Korea at a time when many manufacturers in Canada, including the Big Three auto makers, are struggling to maintain and build markets," Mr. Hargrove said as he released a report forecasting the impact of a free-trade agreement with South Korea.

Mr. Emerson played down forecasts that an Ottawa-Seoul deal would sideswipe jobs. "As you know, economists can come up with virtually any conclusion they are predisposed to come up with — it’s something you need to look at pretty carefully," he said.

Canada officially launched free-trade talks with South Korea on July 15, 2005, over the opposition of auto makers and ship builders.

The scope of the CAW study differs significantly from that of the federal government reports released yesterday.

While the CAW’s job-loss forecast covers the long-term impact of a free-trade deal on nearly 20 sectors, from clothing manufacturing to machinery makers, the federal government reports focus only on the auto industry.

One report Ottawa released yesterday concludes that a free-trade deal with Seoul would trim "light vehicle" manufacturing in Canada to the tune of between 206 and 1,707 vehicles annually. Averaging out the impact at 957 cars, the study played down the results. "This average represents 0.04 per cent of [annual] Canadian light vehicle production of 2.6 million units," Ottawa’s report said.

A federal official said the Canadian government’s study forecasts deal-related losses of only five to 35 light-vehicle-manufacturing assembly-sector jobs, although this report examined a smaller portion of the auto industry than the CAW did.

Mr. Hargrove said it makes no sense to sign a deal that even Ottawa’s studies show would cost jobs. "Why would we enter into an agreement where our own studies show that there’s no advantage?" the union leader said.

Mr. Emerson promised the auto sector that he wouldn’t sign any deal that is "destructive to the Canadian automotive sector," and assured opponents that Ottawa is far from a deal with Seoul today.

"I wouldn’t call it an impasse. We’re not where we want to be, but these negotiations go on."

Canada opened formal free-trade negotiations with South Korea as part of its drive to open up new, fast-growing Asian markets.

Trade watchers have said South Korea is the most flexible and eager partner in Asia for a free-trade agreement, and a deal there would give Canadian companies a beachhead from which they can build alliances in neighbouring countries.

Mr. Emerson said it would be shame if the United States clinched a deal with Seoul before Ottawa did.

All the major auto makers that manufacture in Canada are currently lobbying Ottawa to try to stop a deal with South Korea.

South Korean vehicles are imported by Hyundai Auto Canada and Kia Motors Canada, neither of which assembles them here.