Canadian Prime Minister Stephen Harper has announced that Canada and South Korea have concluded negotiations on a free trade agreement, under which, the Canadian tariffs on imports of South Korean cars will be phased out over a period of three years.
Canada, which imposes a 6.1% tariff on South Korean passenger cars, will phase it out the tariff in three annual cuts. The first cut is expected to occur as soon as the agreement is implemented.
In return, South Korea will eliminate its 8% tariff on Canadian car imports as soon as the agreement is implemented.
The new agreement is expected to help Canadians tap the South Korea's $1.1-trillion economy, while creating thousands of jobs in Canada.
In a statement, Stephen Harper said, "Canadian businesses, investors and consumers in every province stand to benefit significantly from the increased market access that the agreement will provide."
In response, Ford of Canada opposed the agreement stating that South Korea will remain one of the most closed automotive markets in the world under the deal negotiated by the Canadian government.
No Canadian manufacturer can compete with a market controlled by non-tariff barriers and currency manipulation; however, the trade agreement negotiated by the Canadian government with South Korea fails to address these issues, according to the automaker.
