South Korea trade deal could save you money — someday

CBC News Posted: Mar 12, 2014 5:00 AM ET Last Updated: Mar 12, 2014 6:57 AM ET

The Canada-South Korea free trade agreement, which is expected to remove nearly all tariffs between the two countries, has been well received by various sectors of the Canadian economy — with the exception of the automotive industry, which has raised concerns about the potential for tens of thousands of manufacturing jobs lost.

The government insists the effects of removing Canadian tariffs on South Korean cars would be "negligible," citing a 2012 study conducted for the Department of Foreign Affairs that shows the potential for job losses in the hundreds — not tens of thousands.

Canadian exporters of agricultural products such as beef, pork, canola and grains will be among the winners in the free trade deal with South Korea, but the benefits to Canadian consumers may not be as striking.

However, International Trade Minister Ed Fast told CBC News Network's Power & Politics on Tuesday that the elimination of tariffs would be good for Canadian consumers.

"We're going to see better value for the consumer, there will be greater choice for our consumers. If you ask consumers on the street, 'Would you like to pay a little bit less for your TVs that you buy?' they would say absolutely yes."

Here are some of the products imported from South Korea that Canadian consumers could expect to pay less for:

Vehicles: Canada will drop its 6.1 per cent tariff on imports of South Korean vehicles over a three-year period, with the first cut coming once the agreement is in force. Two years after the agreement is in effect, tariffs will be completely eliminated, which means Canadians can expect prices to come down on South Korean-made makes such as Kia and Hyundai.Appliances: Canada will eliminate tariffs that currently run up to eight per cent on major appliances within three to five years. That means Canadians can expect to pay less for refrigerators, stoves, washers and dryers made by LG and other South Korean brands.Electronics: Duties run up to 14 per cent on consumer electronics imported from South Korea. Under the new free trade agreement, Canada will drop its tariffs over three to five years, and Canadians can expect to see prices come down on digital cameras, video camcorders and TVs made by Samsung and others in South Korea.Apparel and footwear: Canadians can expect to pay less for clothes and shoes made in South Korea once duties that currently run up to 20 per cent are removed over a period of three to 11 years.

While cars and major appliances figure on the list of top 25 products Canada imports from South Korea, consumer electronics, clothes and shoes do not, because Canada does not import them in significant amounts.

When it comes to paying less for imported goods, consumers in South Korea may come out a little further ahead than Canadian consumers. Under the new trade deal, South Korean shoppers could pay less on a greater array of food products.

Here are some of the products exported from Canada that South Korean consumers could expect to pay less for:

Vehicles: As soon as the agreement comes into force, South Korea will drop all existing tariffs on imports of Canadian vehicles. Current duties run up to eight per cent.Fish and seafoodLeather clothingBeef, pork, canola and grainsFrozen french fries Maple sugarRye whiskyIce wineChickpeas and lentils

The prospect of South Korea dropping its tariffs, which run up to 27 per cent, on chickpeas, primarily grown in Saskatchewan, did not go unnoticed by Premier Brad Wall, who thought it important enough to highlight in a post on Twitter.

Oh and phase out of Korean duties on our chick peas and lentils is also part of the @pmharper Korean trade deal. 3-5 yrs.

— Brad Wall (@PremierBradWall) March 11, 2014

Consumers will not feel the savings for some time to come, as there will have to be a legal review of the final trade agreement followed by translation into Korean, English, and French before it is tabled in Parliament and then ratified by both governments.

While it is not known how long that could take, the Canadian government hopes to have the agreement come into force "as soon as possible."

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Stephen Harper touts South Korea deal 'wins' on B.C. visit

Prime Minister Stephen Harper was in B.C. today, where he touted the benefits of the Canada-Korea free trade deal not only for the provinces, but particularly for B.C.

The free trade agreement is expected to eliminate nearly all tariffs between the two countries, giving Canadian businesses increased access to South Korea and a window into other Asia-Pacific markets.

"There is no province that is going to benefit from this deal with Korea more than British Columbia," Harper told a B.C. Chamber of Commerce gathering in Vancouver, where he stopped on his way back from South Korea.

"B.C. business has tremendous gains and obviously B.C. business is more aware of the export opportunities that exist in Korea and through Korea to other Asian markets," Harper said.

Harper was in B.C. taking part in a moderated question and answer session with John Winter, the president and CEO of the B.C. Chamber of Commerce.

The free trade agreement would also see South Korea drop its three per cent tariffs on liquefied natural gas, giving Canadian exporters duty free access for their products.

While Canada does not currently export LNG to South Korea, the agreement would help Premier Christy Clark's push to broaden those markets into the wider Asia-Pacific region.

Winter called the elimination of those tariffs "a good step going forward."

The trade deal has been well received by most sectors of the Canadian economy with the exception of those in the automotive industry, who worry the deal will cost Ontario tens of thousands of manufacturing jobs.

Harper defended the free trade agreement against those claims saying, "We know there is some division of opinion in the auto sector, but there are parts of the auto sector that are very supportive?," the prime minister said pointing to Honda and Toyota.

The Japanese firms, both of which manufacture cars in Canada, have come to welcome the deal in the hope that Canada will eventually sign a similar one with their home country.

While Ford has not been supportive of the agreement, Harper said South Korean cars are already being imported duty-free through the U.S. and its free trade deal with South Korea.

"We're in an era where we are not going to win by trying to protect sectors. We have got to get out there, we've got to compete with the best and we've got to win," Harper said.

On the whole, Harper said that having South Korea drop tariffs, which run up to three times higher than Canada's, represents "some very, very big potential wins in terms of making Canadian goods much more competitive?."

The federal government insists the concerns expressed by Ontario's auto sector are overblown, saying the effects of removing Canadian tariffs on South Korean cars would be "negligible," citing a 2012 study conducted for the Department of Foreign Affairs that shows the potential for job losses in the hundreds — not tens of thousands.

Harper used the public event to join other G7 leaders in calling on Russia to back away from a referendum in Ukraine's Crimea region.

"All of the G7 countries remain collectively strongly committed to the view that we will not accept Russia's illegal occupation of Crimea," Harper said.

When Harper was in Vancouver for a similar event in January, two climate change activists managed to sneak up behind him and onto the stage where he was sitting.

"I'm glad we got through this alone on the stage," Winter said, drawing laughs and applause from the business audience.

"I think B.C.'s reputation has been tattered," the moderator joked as he wrapped up the question-and-answer session.

"I was going to say, it doesn't really feel like B.C.," Harper said laughing along.

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