Livestock, grain groups hail step forward on Korea trade deal

Tariffs on Canada’s ag exports to South Korea could continue to average over 52 per cent without a free trade deal in place, Canadian ag groups warn. (Cia.gov)

For groups hoping to maintain access to South Korea’s markets for meat and crops, the Canadian government’s move to get its free trade pact with Korea before the House of Commons couldn’t come soon enough.

International Trade Minister Ed Fast on Thursday tabled the text of the Canada-Korea Free Trade Agreement, briefly noting the deal’s potential to “boost Canada’s economy by $1.7 billion and increase Canadian exports to Korea by 32 per cent.”

General economic boosts aside, facing rival exporters who already have or are working toward free trade pacts with Korea, Canada’s agri-food groups say they don’t want to see another year go by in which those competitors gain yet more of a tariff advantage.

“It is critical for the Canadian beef sector that the agreement be implemented by Jan. 1 or earlier so that we can keep pace with our U.S. and Australian competitors,” said Dan Darling, a cow-calf producer at Cramahe, Ont. and the foreign trade chair for the Canadian Cattlemen’s Association, in a CCA release.

“Tabling the text of the agreement in Parliament will allow the CCA and all Canadians to fully examine its provisions,” he said Thursday. “The next step will be for the government to introduce an implementation bill in Parliament for passage before the end of the year and for the Koreans to do likewise.”

For Canada’s beef export sector, a trade deal with Korea would see that country’s 40 per cent tariff on fresh and frozen beef completely eliminated in 15 equal annual steps. The 18 per cent tariff on offals would end in 11 such equal steps, the CCA said.

Similarly, South Korea’s pork import tariffs for countries without trade deals sit at 22.5 per cent for chilled pork and 25 per cent for frozen pork, the Canadian Meat Council noted in a separate release.

Canada’s canola seed exports to Korea also face a 10 per cent tariff, on top of other tariffs on crude and refined canola oil, the Canola Council of Canada noted in a separate release Friday.

More generally, tariffs for agricultural exports to South Korea would continue to average over 52 per cent if a trade deal doesn’t pass, the Grain Growers of Canada added Thursday.

“Rebound and surpass”

The U.S. implemented its own trade pact with Korea in 2012 and is already seeing increasing tariff advantages over competing exporter nations, the groups noted. Australia, which reached its trade deal in December 2013, is working toward implementation. Canada and Korea finalized the terms of their deal in March. [Related story]

The CCA noted Canada’s beef exports to Korea have shrunk from $40 million in 2002 to $7.8 million in 2013; the Canadian Pork Council noted Canada’s pork trade with Korea in 2011 was worth about $223 million, compared to $129 million in 2012 and $76 million in 2013.

Since the start of 2014, export volumes of beef to South Korea have shrunk by a further 56 per cent, while shipments of pork have dropped by 23 per cent, the CMC said.

“Once Canada’s meat processors and exporters regain competitive access, it is projected that annual beef and pork exports will rebound and surpass their previous peaks.”

CPC chairman Jean-Guy Vincent said Thursday the Canadian and South Korean goverments “are working toward an aggressive timetable to bring the agreement into force” and described the tabling of the deal’s text as “a clear demonstration of the commitment to bring the agreement into force for Jan. 1, 2015.”

Once a Canada-Korea free trade deal comes into force, the government reiterated Thursday, Canadian businesses are expected to “immediately” benefit from removal of Korean duties on 81.9 per cent of tariff lines, rising to 98.2 per cent of tariff lines by the time the agreement is “fully” implemented.

South Korean tariffs on Canadian goods now average 13.3 per cent across all relevant sectors, compared to 4.3 per cent for Canada’s tariffs on Korean goods, the government added. — AGCanada.com Network

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