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Canada/Korea trade pact’s final text signed

Canada’s Prime Minister Stephen Harper and South Korea’s President Park Geun-hye signed the final text of the two countries’ free trade pact on Monday on Parliament Hill. (Jill Thompson photo courtesy PMO)

Now signed and sealed, a trade pact that’s expected to level the playing field for Canada’s agrifood export sectors in South Korea is waiting on implementation.

Prime Minister Stephen Harper and Korean President Park Geun-hye formally signed off on the free trade agreement’s final text at a ceremony Monday in Ottawa, three months after the text was tabled in the House of Commons.

Both reaffirmed a “mutual commitment to have the agreement enter into force as quickly as possible,” the federal government said Monday.

Next steps in Canada include introduction and passage of implementing legislation, followed by regulatory updates, the government said. A ratification bill also awaits review and approval from the Korean National Assembly.

“Once these provisions are complete, Canada and Korea will exchange diplomatic notes, required for entry into force, to notify each other of the completion of their domestic procedures,” the government said.

Canadian farm groups — which for the past few years have watched as their agrifood export rivals, such as the U.S., Australia and the EU, scored favoured access to the Korean market through earlier bilateral deals with Seoul — hailed Monday’s signing.

Once fully implemented, the deal is expected to remove Korea’s duties on 100 per cent of non-agricultural exports and 97 per cent of current agricultural exports, the government said Monday. Canada, for its part, will eliminate duties on about 99.9 per cent of its imports from Korea.

The Canadian Cattlemen’s Association on Monday noted the final text calls for a 40 per cent Korean tariff on fresh and frozen beef to be “fully eliminated in 15 equal annual steps” while an 18 per cent tariff on offals will end in 11 such steps — a faster pace than the rate of reduction for offals from the U.S.

Tariffs of two to eight per cent on beef fats and tallow are to be eliminated “immediately on implementation,” the CCA noted.

Korea, which closed its ports to Canadian beef after Canada found its first domestic case of BSE in 2003, reopened to the Canadian product in 2012 — the same year Seoul’s free trade deal with the U.S. came into force.

“For the past few years, Canada’s key beef competitor, the U.S. has enjoyed an increasing tariff advantage flowing from its free trade agreement with South Korea. Today’s formal signing of the text brings us an important step closer to restoring a competitive position for Canadian beef in the Korean market,” CCA president Dave Solverson said Monday.

“More value”

In 2002, Korea was a $40 million market for Canadian beef and its fourth largest export destination, the CCA noted. In 2013, Canada exported $7.8 million in beef.

The CCA’s director of government and international relations, John Masswohl, noted the deal calls for “an aggressive phase-out on (tariffs for) offals that get more value in Korea than they do here in North America.”

The abomasum, one of a ruminant’s stomach chambers, is commonly used in Korean barbecue, and intestines and tendons are also valued in Korean cuisine, the CCA said.

Canada’s pork trade with Korea, meanwhile, has also been under pressure from other pork-exporting countries’ bilateral trade deals with Seoul. The Canadian Pork Council noted in March that the value of Canada’s pork exports to Korea has shrunk from $223 million in 2011 to $129 million in 2012 and about $76 million in 2013.

Patti Miller, president of the Canola Council of Canada, said a Canada/Korea pact, when implemented, could put canola “on equal footing with other oilseeds, improving export opportunities for both seed and oil.”

The trade pact calls for Seoul’s current five per cent tariff on Canadian canola seed to be eliminated “immediately” when the agreement takes effect, with tariffs on refined canola oil and crude canola oil to be eliminated over three and seven years respectively, the council said.

The council estimated the deal could double South Korea’s imports of Canadian canola seed and oil, now worth about $60 million to $90 million per year. — AGCanada.com Network

 

 

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