On March 11, 2014, Prime Minister Stephen Harper announced the Canada-Korea Free Trade Agreement (“CKFTA”), concluding ongoing and substantive negotiations for a bilateral free trade agreement between these two countries. The objective of the trade agreement partners is to significantly boost trade and investment ties between the two countries and to create employment opportunities for these two pacific rim economies, and represents Canada’s first bi-lateral free trade agreement with an Asian economy.
Given the existence of the US-Korea Free Trade Agreement (also known as the KORUS FTA) which became effective on April 1, 2007, the CKFTA redresses the economic balance for Canadian companies competing with Korea’s other trading partners, including the United States. As with all FTAs, they are negotiated as much for the economic benefit which will accrue to the individual contracting parties, as for the comparative advantages that will accrue to each state, vis a vis it’s third party trading partners. That is to say, that there is a broader strategic advantage attributed to these sort of FTAs, and that objective has certainly been achieved by Canada in relation to the new CKFTA.
In that regard, Korean and Canadian consumers will benefit from a greater variety of goods at lower prices, as the Free Trade Agreement will cover virtually all aspects of Canadian-Korean trade. This will include goods and services, investment, government procurement, environment and labour cooperation, and other areas of economic activity.
The Agreement eliminates tariffs and reduces non-tariff measures that hinder market access for Canadian exporters and investors in Korea, bringing transparency and predictability to the business environment. Once the Agreement is fully implemented, Korea will remove duties on 98.2 per cent of its tariff lines, covering virtually all of Canada’s imports.
The Canada-Korea Free Trade Agreement will benefit a wide range of sectors, including industrial goods (e.g. chemicals and plastics, information and communications technology, aerospace, metals and minerals, etc.), agricultural and agri-food products, wine and spirits, fish and seafood, and wood and forestry products. The Agreement will also benefit Canada’s world-class services sector and strengthen opportunities and protection for two-way investment.
The Agreement is informed by public consultations, and reflects the views and priorities of Canadian businesses, provinces and territories, and other stakeholders. It has the support of Canadian businesses and the associations that represent them.
For more information, please see the Government of Canada (Foreign Affairs, Trade and Development Canada web site.