Last week, Canadian Prime Minister Stephen Harper and South Korean President Park Geun-hye signed a landmark free trade agreement between the two countries. The agreement marked the end of a ten-year process and the first such free trade deal for Canada with an Asian country. South Korea isn’t a new market for Canadians, it’s currently the country’s seventh-largest trading partner and third largest in Asia after China and Japan. However, in recent years, exports from Canada to South Korea have declined and imports have increased. This is said to have been caused in great part due to this lack of a free-trade agreement. The expectation for Canada is that export figures will climb with the new agreement.
“When you think Asia, you think of the growth of its population and their increase in spending power,” said Alberta MP Chris Warkentin. “And having easier access to their market means access to more than 50 million citizens.”
South Korea is the world 15th biggest economy, and is a gateway to emerging and fast growing markets in the Asia-Pacific region. “It’s very important for Canada in a strategic sense to be a player in the Asia-Pacific region. All of the statistics show that that will be the region of the world where there will be most economic growth. And for Canada, it’s important to be there. This will be an indication that Canada is a serious player in the Asia-Pacific economy” said Canadian International Trade Lawyer, Lawrence Herman.
– Which Canadian exporters will likely benefit the most?
Canadian exports of pork and beef are expected to greatly benefit from the deal, as it has been said that Canadian exports to South Korea have greatly declined since the US-South Korea free trade deal took effect in 2007. Other key Canadian exports that will likely see an increase are lumber, grains, oil seeds, food products (notably: rye whisky, ice wine, maple sugar, fish and seafood, lentils and chickpeas), and aerospace products.
– Which South Korean imports are expected to increase now that Canadian consumers can pay less for them?
- Vehicles: South Korean-made makes such as Kia and Hyundai.
- Appliances: refrigerators, stoves, washers and dryers made by LG and other South Korean brands
- Electronics: digital cameras, video camcorders and TVs made by Samsung and others in South Korea.
- Apparel and Footwear: Clothes and shoes made in South Korea
For more information on specific changes in terms of duties and tariff lines resulting from the new deal, check out the Delmar website or contact us. For more in depth information on the agreement, you can check out the Foreign Affairs, Trade and Development Canada website.