Canadian Manufacturing

Bungled South Korea trade talks could cost $1 billion

Canada risks losing all of its $300 million in annual pork exports to South Korea along with market share in some other agricultural products if it doesn't quickly sign a free trade deal with Seoul, industry officials said Thursday.



OTTAWA—Canada risks losing all of its $300 million in annual pork exports to South Korea along with market share in some other agricultural products if it doesn’t quickly sign a free trade deal with Seoul, industry officials said Thursday.

The situation has become critical, they say, because the U.S., Europe and Chile have already concluded new trade deals with South Korea that will eventually allow duty free access into that country.

Ottawa’s trade talks with the Asian country broke off after 2008 over a number of sticking points, particularly objections from Canadian automakers over Korean restrictions on autos and parts.

Duties on pork entering Korea range from 22.5 to 25 per cent, say producers, and will start phasing out for countries that have concluded a trade deal as soon as the treaty is ratified. The U.S. will have duty free access by 2016.

That will leave Canadian producers out in the cold.

“We’re on the outside at the end of a very long line of countries that will have preferential treatment,” said Barry Sutton, vice-president of international sales for Maple Leaf Consumer Foods.

“We’re going to lose it all within 18 to 24 months without a deal.”

With an agreement, Sutton and Jurgen Preugschas, president of the Canadian Pork Council, said they believe producers can double exports.

They argue that once beef, wheat and canola exports are lumped in, the stakes for agriculture exports from not having a deal with South Korean could add up to $1 billion a year.

Sutton and Preugschas were in Ottawa on Thursday lobbying MPs to press Trade Minister Ed Fast to resume talks with Korea.

But a spokesman for Fast said in an email response that the government “is determined to enter into a trade agreement only if it is in the best interest of Canadian farmers, businesses and workers.”

But Sutton and Preugschas believe Canada gave up too easily on the earlier round of trade talks with South Korea, noting that the U.S. also was unhappy with first offers but stayed at the table and eventually got a better deal.

“The discussions will be tough, but you can’t make a deal if you don’t start talking,” said Preugschas.

“We’d be very happy with the deal the U.S. got,” added Sutton.

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