Regional and Bilateral Initiatives
Canada-Korea – Free Trade Agreement Negotiations
The purpose of Canada’s free trade agenda is to enhance its
economic prosperity. Virtually all of Canada’s major competitors
are aggressively pursuing FTAs. To remain internationally competitive,
Canada must level the playing field and ensure that its exporters
and investors have competitive terms of access to international
markets. Through the elimination of Korean tariffs, non-tariff barriers
and restrictions to services exports and investment, we expect that
an FTA with Korea would create substantial new opportunities for
Canadian business – from agriculture and electronics to high-tech
and financial services. An FTA with Korea would not only generate
increased export opportunities in the Korean market, but it would
also help open doors for Canadian companies to other fast-growing
economies in the dynamic Northeast Asian region.
To learn more about the benefits of a free trade agreement with
Korea, please see "Free
Trade With South Korea: The Facts".
Update
Negotiations are taking place on a wide range of issues, including
in trade in goods, rules of origin, customs procedures, trade facilitation,
non-tariff measures, cross-border trade in services, financial services,
temporary entry, investment, government procurement, competition,
intellectual property, e-commerce, dispute settlement and institutional
provisions. In addition, consistent with past practice, Canada is
pursuing environmental and labour cooperation agreements in parallel
with the free trade agreement.
Canada and Korea held a productive eighth round of negotiations
in Seoul, November 20-23, 2006, with progress achieved in several
areas. Canada and Korea discussed market access liberalization for
industrial and non-industrial products. Canada is seeking comprehensive
tariff elimination for all its commercially significant exports,
and is working to address Canadian stakeholder concerns in respect
of Korean non-tariff measures. Elsewhere, in the area of services
and investment, Canada and Korea discussed Annex I & II Reservations
for Existing Measures and Liberalization Commitments.
The ninth round of negotiations is scheduled to take place January
29 - February 2, 2007, in Canada. While negotiations are progressing
at a steady pace, the government believes it is too early to set
a deadline for their conclusion.
Background
On November 19, 2004, the Prime Minister of Canada and President
of the Republic of Korea (South Korea) announced that the two countries
would begin talks to explore the feasibility of negotiating a Free
Trade Agreement (FTA) (See 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, the Canadian
and South Korean trade ministers formally announced the launch of
bilateral free trade negotiations. (See News
Release - July 15, 2005).
On January 31, 2005, Canada 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. (See Canada
Gazette Notice.) 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).
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 2005 reaching $660.2 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 2005, two-way merchandise trade was approximately $8.2 billion
(Canada exported $2.8 billion and imported $5.4 billion), while
two-way direct investment was $1.1 billion (Canadian direct investment
in Korea was $779 million, while Korean investment in Canada was
$364 million). In 2004, two-way trade in services was $1.1 billion
(Canada exported $706 million and imported $350 million).
A bilateral free trade agreement with Korea could deliver significant
commercial benefits across many sectors of the Canadian economy.
An FTA would better enable Canadian companies to tap into the value
chains of globally competitive production and supply from Korean
corporations, sell raw materials and key competitive technologies
and products, and employ Korea as a strategic base for building
an export and manufacturing presence in Northeast Asia, including
China and Japan.
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 provides the opportunity
to maximize the potential for a win-win outcome in the form of a
successful FTA. It is also expected that an FTA with Korea could
serve as an important building block to greater economic ties with
other Northeast Asian economies.
Reports
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.
Interested Canadians continue to be invited to make submissions
on any area of the Canada-Korea negotiations using either the existing
consultation processes above, or through the departmental contact
points below.
Contact Point
If you have questions or comments about this initiative we would
like to hear from you. Please contact the Department of Foreign
Affairs and International Trade at:
Regional Trade Policy Division (TBB)
Foreign Affairs and International Trade Canada
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 Canada’s relationship with Korea and
other countries in the region, please consult the following websites:
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