Canada, South Korea conclude long-delayed free trade deal

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

Canada and South Korea announced on Tuesday they had wrapped up talks on a long-delayed free trade deal that had stalled for years amid squabbles over exports of autos and beef.

The deal - outlined in a statement by Canadian Prime Minister Stephen Harper - is particularly important for Canada, which is trying to cut its reliance on the U.S. market.

The agreement is the first Canada has concluded with a nation from Asia, a fast-growing part of the world that Ottawa is deliberately targeting.

Canada's Trade Ministry says exports to South Korea in 2012 were worth C$3.7 billion ($3.4 billion) while imports from South Korea hit C$6.4 billion.

Canadian exports though have steadily dropped since a free trade deal between the United States and South Korea came into effect in March 2012.

The talks with South Korea began in 2005, but later stalled over disputes about auto exports and a delay by Seoul in scrapping its ban on Canadian beef. South Korea lifted its nine-year-old ban in 2012.

Canada says the deal will boost exports by 32 percent, equivalent to C$1.7 billion a year. South Korean exports should grow by 20 percent a year, or around C$1.3 billion.

South Korea will remove duties on 98.2 percent of its tariff lines, covering virtually all Canadian exports.

"Given that the average of Korea's tariffs are currently three times higher than Canada's (13.3 percent versus 4.3 percent), tariff elimination will be particularly advantageous for Canadian businesses," the government said in a statement.

The deal will hearten Canadian pork producers, who say their exports have plunged since the U.S. deal with South Korea came into effect.

But some auto makers with Canadian operations, such as Ford Motor Co., will be less happy. The deal means Canada will remove its 6.1 percent tariff on imports from firms such as Kia Motors Corp and Hyundai Corp.

This, some firms worry, will prompt a flood of South Korean imports. Ford notes that Canada imported around 131,000 South Korean vehicles in 2012 while exporting just 3,000.

The 6.1 percent tariff will be eliminated over three years but this may not be enough to assuage Ford. International Trade Minister Ed Fast told CTV television on Sunday that the deal would reflect many of the auto industry concerns.

"My role isn't simply to promote the narrow interests of the auto sector itself. My role is to promote the national interests. Virtually every other sector of our economy has told us this trade agreement is absolutely critical," he said.

Japanese auto makers with Canadian operations initially opposed the deal but later changed their minds on the grounds that the Canadian deal with South Korea could pave the way for one with Japan.

Canadian officials downplay the potential damage to the auto industry, noting that 88 percent of Canadian-made vehicles are already exported.

The agreement is relatively minor compared with a similar pact Canada agreed in principle last year with the European Union, one which the two sides say could boost bilateral trade in goods and services by a fifth to 25.7 billion euros ($35 billion) a year.

Fast told CTV that Canada and South Korea hoped the deal would formally come into effect next year.

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left

Tube Series (TS) Conveyors

USC’s Tube Series Conveyors combine the gentleness of the signature Seed Series with the traditional stability of a tube-style conveyor, ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form