February 2, 2012

CCA to concentrate on Canada-Korea Free Trade Agreement

The Canadian Cattlemen's Association (CCA) is focusing towards the completion of a Canada-Korea Free Trade Agreement (FTA) negotiations, now that the Canadian beef and cattle exports to South Korea have resumed.

On January 20, 2012, the Canadian Government announced that Korea had ended its nearly nine-year ban on imports of Canadian beef and cattle. Korea was the last major beef importing country to holdout from resuming importation of Canadian beef following the 2003 discovery of a case of bovine spongiform encephalopathy (BSE) in Canada.

South Korea is a lucrative market for the Canadian beef industry -- Canadian beef exports are estimated to be CAD30 million (US$30.1 million) to Korea by 2015 -- but its clout as a trading partner reaches far beyond agriculture.

Canada-South Korea two-way merchandise trade was valued at CAD9.8 billion (US$9.83 billion) in 2010. Canadian merchandise exports to South Korea were CAD3.7 billion (US$3.71 billion), while Canadian merchandise imports were CAD6.1 billion (US$6.12 billion), the CCA said.

Canada and South Korea launched negotiations towards a FTA in 2005. Talks ceased in March 2008 due to challenges in a number of areas including agriculture. In the interim, South Korea signed FTAs with several countries, including the EU and the US.

The Korea-US FTA is of particular concern as it will provide US beef with a tariff advantage over Canadian beef in the Korean market. As soon as the Korea-US FTA is implemented in February, US beef will enter Korea at 37.4% duty while Canadian beef remains at 40%. Next year, US beef will be down to 34.7% duty with a further reduction every year until US beef is duty free.

Going forward, the CCA will work with the Harper Government as it seeks to deepen the Canada-Korea partnership. Completion of the Canada-Korea FTA will become the new Canada-Korea priority for the Canadian cattle and beef sector.