A Snapshot of Canada-Korea Relations (Part 1)

Although South Korea was commonly referred to as “Asia’s next giant” back in the early 90s, it took another decade for negotiations of the Canada-Korea Free Trade Agreement (CKFTA) to commence. Launched during the summer of 2005, on the 15th of July, the goal of CKFTA was said to enhance crucial bilateral economic relationship with Korea, strengthen Canada’s presence in the vigorous northeast Asia region and ultimately generate economic benefits across the Canadian economy. The following table[1] is to provide background on the Canadian and Korean Economies in 2005.

It would take another 9 years at the negotiation table for both parties to agree to a deal.  In fact the first round of negotiations, which has been reported to have had thirteen rounds, was said to have come to a standstill at the 3-year mark in 2008; when both parties walked away displeased with the other.  Canada has a range of policies and programs in place to mitigate negative environmental impacts and enhance positive ones. On the part of the Koreans, Canada’s broad environmental objectives in the negotiating trade agreement were a sticky issue. These objectives were “to preserve Canada’s ability to protect the environment, to ensure mutually supportive relationships between trade agreements and multilateral environmental agreements, to stimulate improved allocative efficiency of resources that generate positive environmental impacts, to strengthen the environmental management capacities of Canada’s trading partners, and to use this strengthened capacity to combat trans-boundary pollutants and invasive species that directly affect Canada’s environment, economy and health.” [2]

It would be yet another 4 years for active reengagement in dialogue to start again. However, round 14 proved to be a success, as announced on March 11, 2014 in Seoul by Prime Minister Stephen Harper and Korean President Park Geun-hye; a landmark agreement, Canada’s first Free Trade Agreement in the Asia-Pacific region, had been reached.

CFKTA meant that Canadian businesses and workers now had access to the world’s 15th-largest economy and the 4th-largest in Asia. Consequently, it was projected to boost Canada’s economy by $1.7 billion and increase Canadian exports to Korea by 32 percent annually by the time the agreement was fully implemented.  But the main reason Canada was eager for this deal is that Korea is a priority market within the Government’s Global Markets Action Plan, a key gateway to the Asia-Pacific region and a major G-20 economy. Canadians were eager to secure Canada’s position in the Korean market in order to compete with economic trace juggernauts like the United States and the European Union, who were both at the time benefiting from preferential access, which caused Canada’s exports to Korea to decrease by $1.5 billion, approximately one-third, in areas ranging from industrial goods to agriculture and agri-food products, fish and seafood products, forestry and value-added wood products, services and investment.

In statistical terms, under the full implementation of CFKTA, South Korea and Canada will remove tariffs on over 98% of tariff lines on entry. This includes all industrial products, such as industrial machinery, chemicals, auto parts, cosmetics, pharmaceuticals, medical devices, aluminum, and aerospace equipment. The Agreement also contains strong provisions to address non-tariff measures, backed by fast and effective dispute settlement to ensure that unjustified trade barriers do not undermine market access gains.

In 2013, Canada imported $7.3 billion in goods from Korea, with motor vehicles being the largest single product category. Other major imports include consumer electronics such as cell phones, computers, televisions and appliances. Imports from Korea represent only 1.5 percent of Canada’s total merchandise imports, however.

Three years have passed since CFKTA came into effect, this series will attempt to analyze and highlight the impact the Canada-Korea Free Trade Agreement had: primarily on the Canadian economy (both the expected economic impacts of goods exported to Korea, and with Korean goods imported to Canada), secondly on the South Korean economy and thirdly by the impact on the whole Korean Peninsula. 


Kaha Haji-Mohamed

Works Cited



2.     Chang, H. J. (2014). Canada Announces Free Trade Agreement with the Republic of Korea. International Business Bulletin.

3.     Ciuriak, D. (2009). Overcoming Obstacles to the Canada-Korea Free Trade Agreement–The Beef Issue.

4.     Ciuriak, D., Xiao, J., & Dadkhah, A. (2015). The Canada-Korea Free Trade Agreement: What it Means for Canada.

5.     The 2012 GDP and bilateral trade figures are sourced from IMF and national statistical agencies.

6.     Young, N., & Matthews, R. (2011). The aquaculture controversy in Canada: activism, policy, and contested science. UBC Press.

Picture titled, "Korea_Changdeokgung_20140407_16," taken by Republic on Korea on April 7, 2014, obtained through Creative Commons (https://flic.kr/p/mRCEr6)

[1] Source: GDP and population figures are from the International Monetary Fund (IMF), International Financial Statis-tics; purchasing power parity data are from the World Bank, World Development Report 2007, Table 1; the Canada-Korea exchange rate used to convert Korean won data into Canadian dollars is from the Bank of Canada website; trade and industrial structure data and inward and outward investment are from Korea National Statistical Office and Statistics Canada respectively.

[2] The EA Committee was comprised of representatives from Foreign Affairs, Trade and Development, Environment Canada, Canadian Environmental Assessment Agency as well as other federal government departments and agencies such as Agriculture and Agri-Food Canada and Finance Canada.