Canada and the Republic of Korea have concluded negotiations for a bilateral free trade agreement (FTA) that will significantly boost trade and investment ties between the two countries. The negotiations were concluded during the visit of Canadian Prime Minister Stephen Harper to South Korea this week, where he met South Korean President Park Geun-hye.
Upon entry into force, the Canada-Korea Free Trade Agreement will significantly improve market access opportunities for Canada’s textiles and apparel sector by eliminating tariffs on almost all of Canada’s exports.Upon the FTA’s entry into force, 99.8 percent of tariff lines will be duty-free (current duties up to 13 percent); these lines include high-tenacity yarn (current tariff of 8 percent), cotton wadding (current tariff of 8 percent) and textiles for technical uses (current tariff of 8 percent), according to Canada’s Department of Foreign Affairs, Trade and Development.
In 2012, Canada’s textiles and apparel exports to South Korea were worth Ca$ 18.2 million. Between 2010 and 2012, South Korean imports of textiles and apparel goods from around the world were worth an average of $10.7 billion annually. So, the FTA will provide additional export opportunities for Canadian textiles and apparel producers.Reacting to the announcement of conclusion of the FTA, Elliot Lifson, president of Canadian Apparel Federation said, “The Canadian Apparel Federation applauds the Government of Canada’s achievement of a free trade agreement with South Korea featuring very progressive rules of origin. As a fast-growing economy and market of increasingly affluent consumers, South Korea has real potential for Canadian apparel exporters.”The FTA with Korea is Canada’s first with an Asian market, and is expected to provide level playing field for Canadian companies competing with Korea’s other trading partners, including the United States and the European Union, who already have free trade agreements with Korea.On the other hand, Canadian consumers will benefit from a greater variety of goods at lower prices, as the FTA covers virtually all aspects of Canadian-Korean trade: goods and services, investment, government procurement, environment and labour cooperation, and other areas of economic activity. Korea is currently Canada’s seventh-largest merchandise trading partner and its third-largest in Asia, after China and Japan.
