| OTTAWA, March 11
OTTAWA, March 11 Canada and South Korea
announced on Tuesday they had wrapped up talks on a long-delayed
free trade deal which had stalled for years amid squabbles over
exports of autos and beef.
The deal - outlined in a statement by Canadian Prime
Minister Stephen Harper - is particularly important for Canada,
which is trying to cut its reliance on the U.S. market.
The agreement is the first Canada has concluded with a
nation from Asia, a fast-growing part of the world that Ottawa
is deliberately targeting.
Canada's Trade Ministry says exports to South Korea in 2012
were worth C$3.7 billion ($3.4 billion) while imports from South
Korea hit C$6.4 billion.
Canadian exports though have steadily dropped since a free
trade deal between the United States and South Korea came into
effect in March 2012.
The talks with South Korea began in 2005, but later stalled
over disputes about auto exports and a delay by Seoul in
scrapping its ban on Canadian beef. South Korea lifted its
nine-year-old ban in 2012.
Canada says the deal will boost exports by 32 percent,
equivalent to C$1.7 billion a year. South Korean exports should
grow by 20 percent a year, or around C$1.3 billion.
South Korea will remove duties on 98.2 percent of its tariff
lines, covering virtually all Canadian exports.
"Given that the average of Korea's tariffs are currently
three times higher than Canada's (13.3 percent versus 4.3
percent), tariff elimination will be particularly advantageous
for Canadian businesses," the government said in a statement.
The deal will hearten Canadian pork producers, who say their
exports have plunged since the U.S. deal with South Korea came
But some auto makers with Canadian operations, such as Ford
Motor Co., will be less happy. The deal means Canada will
remove its 6.1 percent tariff on imports from firms such as Kia
Motors Corp and Hyundai Corp.
This, some firms worry, will prompt a flood of South Korean
imports. Ford notes that Canada imported around 131,000 South
Korean vehicles in 2012 while exporting just 3,000.
The 6.1 percent tariff will be eliminated over three years
but this may not be enough to assuage Ford. International Trade
Minister Ed Fast told CTV television on Sunday that the deal
would reflect many of the auto industry concerns.
"My role isn't simply to promote the narrow interests of the
auto sector itself. My role is to promote the national
interests. Virtually every other sector of our economy has told
us this trade agreement is absolutely critical," he said.
Japanese auto makers with Canadian operations initially
opposed the deal but later changed their minds on the grounds
that the Canadian deal with South Korea could pave the way for
one with Japan.
Canadian officials downplay the potential damage to the auto
industry, noting that 88 percent of Canadian-made vehicles are
The agreement is relatively minor compared with a similar
pact Canada agreed in principle last year with the European
Union, one which the two sides say could boost bilateral trade
in goods and services by a fifth to 25.7 billion euros ($35
billion) a year.
Fast told CTV that Canada and South Korea hoped the deal
would formally come into effect next year.