Trade deal between Canada, South Korea imminent, sources say
Deal with Asian nation comes after two countries have been in negotiations for better part of a decade
OTTAWA—Speculation is rife that Canada and South Korea have finally concluded talks on a free trade agreement that will be signed within days.
The two countries have been trying to negotiate a deal for the better part of a decade, but discussions entered the final phase in recent months.
Although there has been no official confirmation from government sources, insiders familiar with the talks say the pieces have fallen into place in recent days and a deal is imminent.
Part of the impetus is that Korea has already reached deals with the United States, the European Union (EU) and Australia, jurisdictions with similar issues.
But the deal will be controversial, especially since Canadian affiliates of Detroit’s big automakers have warned removing a 6.1 per cent duty on imports would impact their operations in Canada.
However, that unified front fractured last month when the association representing Japanese automakers in Canada came out in favour of a free trade deal, saying it would complement the deal signed in the fall with the EU and ease the path to a pact between Canada and Japan.
John Manley of the Canadian Council of Chief Executives says removing the tariff would pose a challenge to domestic assembly plants, but that an agreement with a major, advanced Asian nation would be beneficial to Canada.
An agreement would also be great news for the Canadian agricultural sector, which has complained that Korea’s agreements with other nations has put them at a competitive disadvantage.
Gary Stordy of the Canadian Pork Council said it’s been a straight line down for pork shipments since the Korea-U.S. deal of about two years ago, with exports falling to about $70-million in 2013 from $223-million in 2011.
South Korea is currently Canada’s seventh largest merchandise trading partner and third largest in Asia after China and Japan.
But the relationship has been decidedly one-sided, with Korea exports totalling $6.3-billion in 2012 while Canadian shipments totalled $3.7-billion.