Canada on verge of free trade deal with South Korea

Despite fierce objection from Ontario’s auto industry, Canada is about to sign a free trade deal with South Korea...

Completion of negotiations between Ottawa and Seoul, under way since 2005, will provide Canada with its first free trade agreement with an Asia-Pacific country and open up markets with Canada’s seventh-largest merchandise trading partner...

The auto industry and union officials have said the agreement will cost jobs and production in Canada’s car manufacturing sector, but proponents of the agreement say it will provide overriding benefits for the Canadian economy, particularly for agricultural producers.

At Queen’s Park, Ontario Economic Development and Trade Minister Eric Hoskins said federal officials have promised to brief the province “shortly” on the looming trade deal with South Korea.

But Hoskins said Thursday that Ontario’s demand for protections similar to those in the U.S.-Korea trade deal has not been tackled...

Hoskins wants provisions to ensure South Korean automakers like Hyundai and Kia, which already sell extensively here, cannot “flood the Canadian market.”

Worried by the possibility of an unbalanced playing field in the U.S. car market, American officials ensured their 2012 pact with Seoul lowered tariffs for GM, Ford, and Chrysler cars and trucks being exported into South Korea.

But U.S. automakers have since voiced concerns that South Korea is using a range of non-tariff barriers related to vehicle standards and regulations to keep American companies from taking advantage of free-trade in South Korea.

“The U.S. auto industry continues to face a myriad of non-tariff barriers (NTBs) in Korea. New auto NTBs are creating uncertainty and preventing U.S. automakers from executing a coherent business plan to increase sales,” the American Automotive Policy Council Inc., which represents the Big Three Detroit companies, said in a statement in December concerning liberalized trade in Asia.

Canadian union officials and automotive executives have echoed this fear in relation to Canada’s expected pact with Seoul, which will phase out the 6.5 per cent duty Ottawa charges on cars from outside NAFTA.

Dianne Craig, president and CEO, Ford Motor Company of Canada, says Ford has supported other free-trade agreements. But “the challenge with South Korea — we’ve been very strong in our opposition to it — is it’s not going to be a fair deal,” ...

“It’s a closed market. We’re very fearful of what this means to Canada. There’s no upside, only downside,” Craig said. “We want fair trade.”...

He noted that “for every one vehicle we export to South Korea, there are 50 vehicles that come from South Korea to the Canadian market.”

Rudy Husny, a spokesperson for Fast, said Thursday, “We will only sign an agreement that’s in the best interest of hard-working Canadians including through the elimination of Korean tariffs and creation of effective tools to counter non-tariff barriers to trade.”...

Still, Hoskins emphasized that overall Ontario supports more liberalized free trade and pointed out the Korea accord would help the food processing and agricultural industries — especially beef and pork producers and winemakers.

This has been excerpted from the 6 March 2014 article by the Star, and is available in its entirety at http://www.thestar.com/news/canada/2014/03/06/canada_on_verge_of_free_trade_deal_with_korea.html.