Regional and Bilateral Initiatives
Canada-Korea – Free Trade Agreement Negotiations
On November 19, 2004, Prime Minister Martin and South Korean President
Roh announced that Canada and Korea would begin talks to explore
the feasibility of negotiating a Free Trade Agreement (FTA) (See
PM News Release).
An FTA between Canada and Korea has the potential to enhance not
only Canada’s important bilateral economic relationship with
Korea but also to strengthen Canada’s presence in the dynamic
Northeast Asia region. On July 15, 2005, International Trade Minister
Jim Peterson and his South Korean counterpart, Trade Minister Kim
Hyun-chong, formally announced the launch of bilateral free trade
negotiations. Canada will pursue its practice of establishing environmental
and labour cooperation agreements in parallel with the free trade
agreement. (See News
Release - July 15, 2005).
On January 31, 2005, Minister Peterson launched extensive domestic
consultations with business, citizen-based organizations and individual
Canadians, as well as with the provincial and territorial governments,
to obtain advice and views on priorities, objectives and concerns
to help define the possible scope of this initiative. In parallel
with these consultations, government officials from both countries
took part in two rounds of exploratory discussions (the first from
January 25-26, 2005 in Seoul, Korea; and the second from March 31
– April 1, 2005 in Ottawa).
Update
Canada and Korea held a positive third round of negotiations in
Ottawa from November 28 to December 2, 2005. This round consisted
of substantive discussions on a wide range of issues relating to
the FTA including discussions on labour and environment.
The fourth round of negotiations is scheduled to take place the
week of February 13, 2006 in Korea.
Consultations
The government appreciates the input of all Canadians who have
contributed to the consultative process to date and wishes to assure
them that their views will be taken into account as the Canada-Korea
initiative proceeds and in the development of Canada’s trade
agenda more broadly. Consultations will continue throughout the
negotiations and Canadians are encouraged to provide their comments
and input on trade issues.
Background
A high-growth and rapidly advancing market, Korea is widely recognized
as a ‘gateway’ to Northeast Asia, a region of strategic
importance to global value chains. With an estimated 48 million
inhabitants and a GDP approaching $900 billion, Korea is the largest
of the four “Asian tigers” (Taiwan, Hong Kong and Singapore).
Korea’s remarkable, and rapid, recovery from the 1997 Asian
financial crisis has resulted in its emergence as the 12th largest
merchandise trading nation in the world, with total merchandise
trade in 2004 reaching $622.5 billion. Korea has demonstrated a
strong commitment to promoting a favourable investment climate and
positive domestic policy reform.
Canada and Korea are established trade and investment partners.
In 2004, two-way merchandise trade was approximately $8.1 billion
(Canada exported $2.3 billion and imported $5.8 billion), and two-way
direct investment was over $1 billion (Canadian direct investment
in Korea was $686 million). In 2003, two-way trade in services was
$889 million (Canada exported $595 million and imported $294 million).
Canada’s interest in Korea lies in three main areas: tapping
into the value chains of globally competitive production and supply
from Korean corporations; selling raw materials and key competitive
technologies and products; and, employing Korea as a strategic base
to establish an export and manufacturing presence in Northeast Asia.
Current and potential export growth exists in many sectors, including;
wood pulp, mineral fuels, metals, electrical machinery, shellfish
and a wide variety of agricultural products. Korean exports to Canada
cover a broad range of sectors, including; vehicles, electrical
machinery, computers, rubber, and steel. The complementary nature
of the existing Canada-Korea trade relationship lowers the risks
of key irritants derailing negotiations while enhancing the potential
for a win-win outcome in the form of a successful FTA. It is also
expected that an FTA could serve as an important building block
to greater economic ties with other Northeast Asian economies such
as China and Japan.
Contact Point
If you have questions or comments about this initiative we would
like to hear from you. Please contact International Trade Canada
at:
Regional Trade Policy Division (EAI)
International Trade Canada (ITCan)
Lester B. Pearson Building
125 promenade Sussex Drive
Ottawa, Ontario, K1A 0G2
Fax: 613-944-0757
E-mail: consultations@international.gc.ca
Useful Links
To learn more about South Korea and Canada’s relationship
with countries in the region, please consult the following websites:
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