Auto Remarketing Canada Editor
Prime Minister Stephen Harper’s announcement regarding a free-trade agreement between South Korea and Canada garnered a bit of a mixed review from the automotive industry and unions.
Unifor, one of Canada’s largest unions in the private sector, even went so far as to say the Canadian auto industry is “threatened” by the free-trade deal with South Korea.
"We cannot stand by a deal that secures a one-way flow of Korean auto imports into the Canadian market, undermining the jobs and industry on which so many Canadians depend, while precious little is done to strengthen our imports to Korea," said Unifor national president Jerry Dias.
Many automakers, including Ford of Canada, announced they oppose the agreement, as well.
A statement released from Dianne Craig, president and chief executive officer of Ford of Canada, voiced the company’s concern: “Over the last two years, both the United States and European Union free trade agreements with South Korea have failed to reverse this one-sided automotive trade flow because the South Korean government continues its long history of maintaining a closed market through non-tariff trade barriers and actively intervening in its currency to unfairly subsidize its exports and protect its home market.”
Interestingly, industry association the Global Automakers of Canada, on the other hand, encouraged the agreement and voiced positive predictions before the deal was penned.
"The Global Automakers of Canada supports all trade liberalizing agreements , EU, South Korea and Japan," said David Adams, president of the association. "With the imminent completion of these negotiations with South Korea, we expect that the Government of Canada will move expeditiously to finalize a Canada/Japan EPA, to level the playing field for all vehicle distributors in the Canadian market, which will create benefits for Canadian consumers.”
Prime Minister Harper announced the deal includes a three-year phased-in removal of Canadian auto tariffs on Korean vehicles and an immediate removal of Korean tariffs on Canadian exports.
According to the Canadian government, the Canada-Korea Free Trade Agreement is predicted to boost the Canadian economy by $1.7 billion and increase Canadian exports to South Korea by 32 percent.
Unifor voiced concerns that Canada wasn’t able to negotiate similar protections to the ones the United States negotiated in its free trade agreement with South Korea.
“The U.S. deal with South Korea included protections against import surges into the US market and a ground-breaking ‘snap-back’ provision which enables the US government to return tariffs to pre-agreement levels if Korean non-tariff barriers limit US exports,” Unifor officials explained. “Even with these provisions, the U.S. has suffered a worsening auto trade deficit.”
Unifor also contends Harper did not address the current trade imbalance.
“We needed our political leadership to broker a deal that addressed the reality that we have 100,000 Korean-made cars being imported to our market, while we are exporting only 100 cars to the Korean market," stressed Dias.