Updated March. 12, 2014 04:05
Free trade talks between Korea and Canada have been concluded eight years and eight months after the opening. The Korea-Canada Free Trade Agreement is Koreas 12th free trade pact and Canadas first with an Asian country. Chances are high that Korea will benefit in the automobile sector, but could suffer losses in the agriculture and livestock field.
Korea`s Trade, Commerce and Industry Minister Yoon Sang-jik and Canada`s International Trade Minister Ed Fast held a bilateral trade ministers meeting in Seoul on Tuesday, and declared the conclusion of trade talks. After getting legal review of the agreement, the two sides plan to preliminarily sign the deal in the first half of this year at the earliest. If parliamentary ratification is processed as scheduled, the Korea-Canada FTA is expected to officially take effect in 2015.
On the conclusion of the FTA, both sides deem the deal successful, with the Korean government expecting that Korean automobiles exported to Canada will have an enhanced competitiveness, and the Canadian side judging that it has opened a beachhead for its advance into the Asian market. Canada has agreed to completely remove its 6.1-percent tariffs on Korean automobiles within 24 months after the effectuation of the trade pact. Last year, Korea exported cars worth 2.23 billion U.S. dollars to Canada, about 43 percent of Koreas overall annual export to the North American country.
Canadian tariffs on auto-related products such as tires and auto parts will also be removed in phases in the next three to five years. Tariffs on Koreas major export items, including electronic appliances, textile, chemicals and machinery, will also be lifted, raising expectation that the nations shipment to Canada will increase further. In contrast, tariffs on Canadian beef that Korea imports will decline by 2 to 3 percentage points every year from the current 40 percent, and will drop to 0 percent 15 years after the FTAs effectuation. As for pork, tariffs on pork belly and refrigerated pork products will be lifted over a 13-year period, while those on frozen pork except pork belly will be removed over a five-year period. Coal, pulp, and hardwood that account for 68 percent of Koreas import from Canada are already zero tariffs, which are not subject to the FTA.
Choi Gyeong-lim, assistant minister at Koreas Trade, Commerce and Industry Ministry, said, The trade agreement will help increase Korean companies market competitiveness in the Canadian market, the 11th largest economy in the world.