Shipyards fear free trade

A federal move that Canada?s shipbuilding industry has feared for some time appears to become a reality when the government resumed free trade talks with the European Free Trade Association. One of the issues at stake is the elimination of a 25% tariff on foreign built vessels brought into Canada. Similar talks will continue next week with South Korea.

Don MacLeod, a spokesman for Secunda Marine in Dartmouth, a company with vessels in the offshore oil and gas industry, said that the elimination of the tariff would have far- reaching effects in the marine industry. The government held three days of talks with the EFTA, made up of Iceland, Norway, Switzerland and Liechtenstein, early this month.

“Canada remains interested in concluding a free trade agreement with the EFTA countries,” Brooke Grantham, a spokesman for Foreign Affairs and International Trade Canada, said. He said the government is aware of the concerns of the Canadian shipbuilding industry and will continue to actively consult with industry stakeholders “to ensure that industry interests are taken into account.”

Grantham also said “current Canadian sensitivities may be addressed through provisions such as longer tariff phase-out periods and product-specific rules of origin.” But Canada will “not open up its government procurement market in shipbuilding in the context of a Canada/ EFTA free trade agreement,” he added.

MacLeod said the big concern is Norway. “What you have in Norway is a highly developed, highly modern, highly profitable fleet of offshore supply vessels that have been developed and prospered behind protective barriers for upward of 30 to 40 years,” he said. Allowing that country?s ships into Canada without a protective tariff would put the Canadian industry at a competitive disadvantage, he said. “When they come in, they won?t be using the suppliers here,” he warned. “All subtrades and suppliers and work will go to Norway. So it is a wider impact on offshore than just vessel owners and shipyards. It?s the whole sector.”

MacLeod said Secunda will continue to oppose a free trade agreement that includes the foreign vessel tariff unless a “whole host” of measures are introduced that would allow Canadian companies to compete fairly.