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Free Trade Agreement with South Korea puts onus on boosting manufacturing competitiveness: CME

Published by Frank Defalco on March 11, 2014

OTTAWA – Canadian manufacturers and exporters will have to step up their game if they are to take advantage of Canada’s new Free Trade Agreement with South Korea signed today by Prime Minister Harper and South Korean President Park.

“This is an important agreement for Canada,” says Jayson Myers, President & CEO of Canadian Manufacturers & Exporters (CME). “Ultimately it will be up to Canada’s exporters themselves to take advantage of the access that this agreement will provide.”

Many of Canada’s key export sectors expect that the deal will open new business opportunities in the South Korean market, Asia’s fourth largest economy and home of more than 50 million consumers.

Myers notes that there are a number of provisions in Canada’s Free Trade Agreement with South Korea that will not only level the playing field with exporters from the United States, European Union, and other countries that have already concluded free trade agreements with South Korea, but that are substantially better than those secured in other trade deals. 

“The expanded approach to investment and services liberalization, procurement, and temporary entry of business people, the adoption of National Treatment and Most Favoured Nation principles and expedited dispute settlement procedures contained in this agreement will provide a distinct advantage to Canadian businesses in the Korean market.

“These provisions should set a standard for negotiations going forward,” Myers says.  “Asia’s rich markets are the next frontier for Canada in our quest to open markets and eliminate tariffs and non-tariff barriers to trade and investment.  Our Free Trade Agreement with South Korea is Canada’s first with an Asian economy and needs to be seen as a first step in gaining much more open access for Canadian exports across the Pacific.”

However, CME recognizes and takes seriously the concerns raised by Canada’s automotive producers, suppliers and other manufacturers that the outcome of the trade agreement will be lopsided in South Korea’s favour.  “We need to ensure that non-tariff barriers in South Korea are actually eliminated, the rules of this trade agreement are effectively enforced and that the dispute settlement procedures contained in this agreement ensure speedy and effective resolution of disputes in the case that unfair practices do indeed occur,” Myers says.

“Tariff elimination may also be a challenge for many manufacturers.  That is why it is more important than ever that governments act urgently to strengthen the competitiveness of Canada’s manufacturing sector, support innovation and export growth on the part of Canadian businesses and take measures that will ensure the growth of automotive and other industrial investments in Canada.

“Ultimately, this agreement should make Canada an even more attractive destination for investors and manufacturers, create jobs and opportunities for Canadians and level the playing field for Canadian businesses making them more competitive on the global stage.

“We now have a system of rules and dispute resolution procedures that will govern our evolving trade relationship with South Korea and guarantee that Canadian exports and investment are treated at least as well as those from other countries.  That is an important achievement,” says Myers.

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