It’s a win for agriculture commodities, namely pork and beef, but a sore spot for the auto industry, as Prime Minister Stephen Harper was in South Korea this week to finalize and sign a free trade agreement with that country.
— Stephen Harper (@pmharper) March 11, 2014
“The completion of a Canada-South Korean Free Trade Agreement was of critical importance for the Canadian pork sector. Korean people recognize the quality of Canadian pork due and we look forward to rebuilding market share lost in South Korea,” said Canadian Pork Council’s chair Jean-Guy Vincent, in a press release. “The absence of an FTA with Korea was causing substantial and growing prejudice to the Canadian pork industry due to the tariff rates since all of our key competitors in Korea have FTAs in place.”
Without an FTA with Korea, Canada’s 223 million dollars of pork trade with Korea in 2011 and 129 million dollars of pork trade in 2012 would largely disappear when the FTAs Korea has signed with three other countries are fully implemented. Canada exported approximately 76 million dollars of pork to Korea in 2013.
“South Korea is an important export market for canola and we applaud the Government of Canada for bringing this agreement to conclusion,” says Rick White, CEO of the Canadian Canola Growers Association. The signing of this agreement will ensure that Canadian canola products entering South Korea receive the same tariff advantages as competing products from countries such as the U.S. and Australia.
“This deal is especially important to Canada, with South Korea having already concluded Free Trade Agreements with the EU, Chile, Australia and the U.S.,” says White. “Until today we’ve been at a competitive disadvantage versus other oilseeds.”
In recent years, canola exports from Canada to South Korea have ranged between $60-90 million annually. “It is anticipated that a free trade agreement with South Korea could double our exports, with growth coming from both oil and seed exports,” says White.
This FTA also increases market access for identity-preserved soybeans. Canada currently only fills 4% of that market, says Henry Van Ankum, chair of the Grain Farmers of Ontario. He adds the FTA is also positive news for commodity corn, soybean and wheat.
“For the past few years, Canada’s key beef competitor, the United States, has enjoyed an increasing tariff advantage flowing from its FTA with South Korea, and Australia is poised to do likewise through their recent agreement with Korea. Their gain has been our loss,” said Dave Solverson, president of the Canadian Cattlemen’s Association, in a Canadian Agri-Food Trade Alliance press release. “(This) means Canadian beef will be able to once again compete for meaningful access in the Korean market.”
“This announcement is good news ,” said Wade Sobkowic, executive director of the Western Grain Elevator Association. “In 2012, Canadian grain exports to Korea were $479 million a year. Today, they are less than $100 million. Now, with the FTA announcement , we can look at rebuilding our presence in the Korean market.”