The Canada-Korea Free Trade Agreement (CKFTA) was ratified in March, setting the scenes for significant trade ties between the two countries and leveling the playing field between the US and Canada in the Asian-Pacific markets.
What is the CKFTA?
The Canada-Korea FTA is Canada’s first free trade agreement in the Asia-Pacific region and aims to provide new access for Canadian businesses and workers to the world’s 15th-largest economy and the fourth-largest in Asia. The CKFTA is projected to boost Canada’s economy by $1.7 billion and increase Canadian exports to South Korea by 32 percent.
South Korea is not only a major economic player in its own right and a key market for Canada and the US; it also serves as a gateway into the dynamic Asia-Pacific region as a whole.
To read more on the specifics of the Canada-Korea FTA, click here: http://pm.gc.ca/eng/news/2014/03/11/canada-korea-free-trade-agreement-ckfta-benefits
How does the CKFTA compare to the US-Korea FTA (KORUS FTA)?
Although CKFTA will help Canadian exporters be more competitive in the Asian-Pacific markets, the trade agreement is seen as more conservative than KORUS. Below is a comparison of these agreements with specific focus on the agriculture and agri-foods sectors.
|Date:||Ratified 4.2.2007Started 3.15.2012||Ratified 4.3.2011Will begin in 2015 (Exact Date TBD)|
|Tariff Elimination:||Ag-products that are not included in ‘immediate tariff elimination’ and ‘need at least 10 years to eliminate the tariff’ is 12.3% of total ag products.||Ag-products that are not included in ‘immediate tariff elimination’ and ‘need at least 10 years to eliminate the tariff’ is 18.8% of total ag products.|
|Excluded from Tariff Concession||16 products||211 products|
|Ag Products under TRQ (Tariff Rate Quota):||19 products||11 products|
“Even though we (US) have better conditions and much higher TRQ quantity than Canada, North Dakota companies who are competing against Canadians might need develop long-term marketing strategies for the Korean market,” said Jiwon Kim, Manager of International Business Development at NDTO and Korea market expert.Most major effects of the CKFTA will not be seen until 2015, but US companies who compete with Canadian companies in global markets should begin to prepare.
To learn more about marketing your products in Korea, contact Jiwon Kim at Jiwon@ndto.com