* Wheat, canola, whisky tariffs fall with implementation
* Canada aims to close beef tariff gap with United States
* Pork exporters look for sales rebound
By Rod Nickel
WINNIPEG, Manitoba, March 11 Canadian beef and
pork exporters say Canada's free trade agreement with South
Korea will help them regain market share in the Asian country,
which has recently turned to supplies from the United States
and other countries that struck deals first.
Canada and South Korea said earlier on Tuesday they had
wrapped up talks on a long-delayed free trade deal, Canada's
first in fast-growing Asia.
The pact is also expected to shore up demand for Canadian
farm products like wheat, canola and rye whisky, all of which
will see immediate tariff-free access upon implementation of the
deal, likely next year.
Disputes about autos and beef held up the deal, which was
nearly a decade in the making. South Korea was one of many
nations to ban Canadian beef after a 2003 outbreak of mad cow
disease, and one of the last to restore trade in 2012, removing
a major irritant.
In the meantime, however, the United States' trade pact with
South Korea came into force two years ago.
"Prior to the (Canadian) deal, we were losing market share.
Quite frankly we were pushed out of the market," said Gary
Stordy, spokesman for the Canadian Pork Council.
The recovery for meat exports can now begin, although the
U.S. head start in the market will be difficult to overcome.
Canadian fresh and frozen beef is subject to a 40 percent
tariff, 8 percentage points higher than beef from the United
States. South Korea, a high-end beef market for steaks and short
ribs, accepts only beef from cattle under 30 months of age from
The tariff on Canadian beef is due to fall over 15 years in
equal annual steps, with the first cut occurring when the deal
is implemented. If that happens in early 2015, it would coincide
with the next scheduled reduction in South Korea's tariff on
U.S. beef, ensuring the U.S. advantage does not grow even
larger, said John Masswohl, director of government and
international relations for the Canadian Cattlemen's
Even so, the difference in tariffs will keep Canadian beef
at a disadvantage for more than a decade, unless Canada is a
winner at another bargaining table in the meantime. Masswohl
said Canada will press at Trans Pacific Partnership talks to
obtain faster tariff reduction from South Korea to match the
South Korea was Canada's fourth-biggest beef export market
in 2002, worth some C$40 million ($36 million) in annual sales.
By last year, it had fallen to seventh place, with sales worth
less than a quarter of the 2002 value.
Canada's largest beef plants are owned by U.S.-based Cargill
Inc and Brazil's JBS USA Holdings Inc.
The South Korean tariff on Canadian pork, ranging from 22.5
to 25 percent by product, is due to fall over four years from
implementation for frozen products. Tariffs will fall over four
to 12 years for chilled pork.
The goal for pork exporters, who include Toronto-based Maple
Leaf Foods Inc and Quebec's Olymel Ltd, will be to
restore Canadian sales to South Korea to normal levels around
C$129 million annually, up from last year's C$76 million, said
Jacques Pomerleau, executive director of Canada Pork
International, a marketing promotion agency.
Canada was the biggest pork supplier to South Korea in 2008,
but has since fallen behind the United States, Germany and
Chile, clinging to an 8 percent market share, Pomerleau said.
Within the agriculture sector, Canada will maintain its high
tariffs on dairy, poultry and eggs, while South Korea will
protect certain farm products such as rice.
DUTY-FREE WHEAT AND CANOLA
Canada's two biggest crops will gain fast access when South
Korea scraps upon implementation its 1.8 percent to 3 percent
tariff on wheat and 10 percent duty on canola.
Just as importantly, the pact makes it easier to resolve any
future trade disputes over non-tariff issues, said Cam Dahl,
president of the Cereals Canada industry group.
"As tariffs disappear, those who love protectionism will
find other ways of closing borders," he said.
The deal looks to double Canadian exports to South Korea of
canola, an oilseed crushed mainly for vegetable oil, from its
current range of C$60 million to C$90 million annually, said
Rick White, chief executive of the Canadian Canola Growers
South Korea will phase out duties on canola oil, a more
valuable product than canola seed, over three to seven years,
depending on the type.
The deal may also give so-called pulse crops, such as beans,
a bigger foothold in Korea. Canada, through companies like
Alliance Grain Traders Inc, is a major exporter.
Tariffs on Canadian rye whisky and on ice wine will fall
immediately upon implementation.