The provincial government is throwing its support behind a free trade agreement with Korea, saying the province is being hurt because of delays over the deal within Canada.
International Trade Minister Teresa Wat said in an interview Monday that Canadian exports to Korea have dropped by 30% in the last year – $1.5 billion.
British Columbia accounts for 52% of those exports, and could lose more market share if Canada fails to conclude an agreement, she said.
The decline in Canadian trade comes at the same time trade is increasing between Korea and the United States, who signed a free trade agreement in 2012.
Free-trade negotiations between Canada and Korea resumed last November after a five-year hiatus but in recent weeks opposition has grown in Ontario, where the provincial government is seeking more protection for auto workers. The Ontario government stated last week that an agreement could hurt the auto sector, Ontario and Canada unless negotiations are expanded to include non-tariff barriers.
Both sides ended talks temporarily in January to deal with two outstanding issues: concerns from the auto sector in Canada and concerns from livestock farmers in Korea over imported beef.
Wat said B.C.'s efforts at attracting and securing trade with Korea are being undermined by delays in reaching an agreement.
Wat said she is not aiming her remarks directly at Ontario or the auto sector, but she wants Ottawa to understand the importance of a free trade deal to B.C.
"All I want to emphasize is that this agreement is very significant. It will be a landmark agreement. Canada is the only G7 nation that has not negotiated a free trade agreement in Asia. China, Japan and Korea are the second, third and fourth largest markets for us in B.C.," she said.
Korea's agreement with the U.S., B.C.'s largest market and largest competitor in Korea, has resulted in exports from the U.S. receiving favourable duty treatment.
The imbalance between costs for U.S. and Canadian exports is showing up in the bottom line of B.C. companies, from seafood producers, to lumber manufacturers and wineries, who now face higher costs in Korea than their U.S. competitors.
B.C.'s seafood industry faces tariffs as high as 20% and has felt the impact already, Christina Burridge, executive director of the B.C. Seafood Alliance, said in a news release.
"The U.S. struck a deal effective in 2012, and Alaskan exporters have already shut our companies out of the Korean market," she said. "It's simply not possible to compete with the U.S. when tariffs are so high. We are losing out."
She said Canada should not let a single sector veto a deal that is good for the entire country.
Korea is interested in concluding a deal with Canada, said Youngjin Kang, chief trade commissioner at the Vancouver Korean Consulate General. He said Korea can be a bridge into Northeast Asia for Canadian goods and technical expertise, and that reaching a negotiated settlement on issues such as livestock, seafood and agricultural products is important to Korea, which has aspirations of joining the larger Trans-Pacific Partnership trade talks.
Kang said he would not be surprised to see an agreement is reached by the end of March.
Wat said Korea is a priority market for B.C. and that improved trade relations with Korea are vital to economic growth and job creation here.
Wat's support for a deal was welcomed by the B.C. Business Council, which is also concerned that B.C. exporters are losing out to their U.S. counterparts.
"We have been outmanoeuvred by the U.S.," said Jock Finlayson, chief policy officer for the business council. "The U.S. has an FTA. That has given U.S. companies and investors better access to Korea than we have," he said.
Finlayson said there is no longer an even playing field between Canada and the U.S. in Korea.
Rudy Husny, press secretary for Canadian International Trade Minister Ed Fast, said in an email that a free trade agreement would protect and create jobs.
"We agree that concluding an FTA would restore a level playing field for Canadian exporters in Korea relative to their U.S. and EU competitors," he said in response to concerns raised by Wat.
He also said Ottawa is still negotiating with Korea and that non-tariff barriers, a concern raised by the auto sector, are on the table.
"We will only sign an agreement that's in the best interest of hard-working Canadians including the elimination of Korean tariffs and creation of effective tools to counter non-tariff barriers to trade."
