Park, Harper Agree To Push South Korea-Canada FTA

When Canadian Prime Minister Stephen Harper telephoned Park Geun-hye to congratulate her on her victory in the South Korean presidential election, both agreed that negotiations on the bilateral free trade agreement (FTA) between their two countries should be concluded quickly.

FTA talks between Canada and South Korea were put on ice in 2008 when the latter maintained its import ban on Canadian beef over "mad cow disease," leading to a challenge by Canada at the World Trade Organization (WTO). That ban was lifted in January this year, and, in reply, Canada has also just terminated the relevant WTO dispute settlement panel.

However, while South Korea remains an important market for Canadian beef, Canada's beef exports will remain subject to a full 40% tariff unless Canada and South Korea conclude an FTA. That compares unfavorably with the reduced import duty for beef from the United States following the implementation of the South Korea-US FTA, in which the South Korean tariff on US beef imports will decrease by 2.7% per year until US beef is duty free in 2026.

In addition, Canada presently imposes a 6.1% import duty on South Korean cars, and the South Korean side would like that tariff eliminated completely.

At a previous meeting in June last year, between Harper and the current South Korean President Lee Myung-bak, it was agreed to broaden the potential for increased trade and investment between the two countries by resuming the FTA talks, and Harper has now agreed with Park, the next President, that the resumed negotiations should be speeded up.

January 29, 2013

Source: Tax News