It is expected that the free trade deal between Korea and Canada will be concluded next week after a long delay.
At present, the Canadian government is collecting opinions on the major issues of the FTA from local entrepreneurs, which means that the conclusion of the agreement is around the corner. The two countries had 13 rounds of negotiations for the purpose between July 2005 and March 2008. However, the talks were halted as Canada filed a suit with the World Trade Organization (WTO) against the Korean government’s import ban on Canadian beef.
The import was resumed in January 2012 to make a breakthrough in negotiations, but the Korean government postponed the talks due to the burden of opening the domestic beef market during the early stage of the administration. Then, the talks gained some speed as the Korean government showed its will to participate in the Trans-Pacific Partnership (TPP). Canada is a member of the TPP, and the FTA between Korea and Canada has an important meaning for Korea’s membership in the TPP.
The conclusion of the deal is expected to be a great boon for Korea’s export of automobiles and auto parts, because Korea and Canada have complementary market structures. In this context, the Korean government is trying to eliminate the tariffs on these products, which account for close to 50 percent of the total exports to Canada. The tariff rate is 6.1 percent for cars, and zero to 6.1 percent for auto parts. Once the tariff is eliminated immediately as in the Korea-Australia FTA, an increase in exports can be witnessed even in the short term. In particular, Canada is one of the markets where all of the global leading carmakers are competing against one another.
Canada is calling upon the Korean government to eliminate the 40 percent tariff on beef and open the agricultural, fisheries, and livestock markets. In that case, US, Australian and Canadian beef are likely to flow into Korea in quantity, causing much tougher competition.
In the meantime, Canadian Prime Minister Stephen Harper will reportedly visit South Korea this week for a summit with President Park Geun-hye on boosting bilateral cooperation in trade and other areas, the presidential office said Sunday.
The Canadian leader is scheduled to arrive in South Korea on Monday for a two-day official visit, his fourth trip to Seoul since December 2009.
Harper will hold a summit meeting with Park on Tuesday about ways to cement strong bilateral relations and advance cooperation in such sectors as trade and investment, energy and resources, and science and forestry, the presidential office said in a statement.
The two leaders are also expected to exchange views on the current situation in Northeast Asia, including the Korean Peninsula, it added.
It will be the second summit between the leaders. Park and Harper held their first meeting in Bali, Indonesia, in October last year on the sidelines of the Asia-Pacific Economic Cooperation summit.