Korea-Canada FTA will accelerate investment

There are two types of relationships in the world. The first is a rivalry, where one must compete and win to survive. The other is a partnership of supplementing each other and pursuing mutual interests. A free trade agreement (FTA) is the latter. Korea and Canada recently signed an official free trade agreement, and the mutually supplementary deal is expected to bring a turning point for both countries to take a new leap of cooperation.

In fact, the trade volume between the Canada and Korea has not met expectations. In the five decades of friendly ties, trade has remained at about $10 billion. However, when the Korea-Canada FTA takes effect, the 5 to 8 percent tariff on Korean automobiles, car parts, textiles and household goods will be removed within three years. As Korea is the first Asian country to sign an FTA with Canada, we have a chance to enhance our competitiveness against China and Japan. Also, partnerships in fields with high added values, such as the automobile and aviation industries, as well as energy and resources development are expected to grow.

As a part of Korea’s economic mission to Canada, I spotted great opportunities to advance in the household consumer goods market. In time for President Park Geun-hye’s state visit and the signing of the FTA, the North American distribution networks export conference was held, and local distributors showed positive reactions. Twenty-six small and medium-sized Korean companies and 50 major distributors in the North American region participated in the event. The distributors showed an interest in food, health and beauty products made in Korea. With the population of Asian immigrants surging in Canada, a new market for Korean consumer goods is growing. Just as Retail Council of Canada President Diane Brisebois said, with competitive price and quality, Korea could become a supply base for Asian store brands in the North American distribution network.

It took a turbulent journey of nine years for the Korea-Canada FTA to be signed. Now, we need to accelerate the expansion of trade and investment. Companies should focus on product development and marketing, and the government needs to devise supplementary plans for agricultural and stockbreeding fields. The National Assembly needs to process the bill in the main session before the end of the year so that it can go into effect earlier next year and exporters can begin to feel the improved results.

*Oh Young-ho, CEO of the Korea Trade-Investment Promotion Agency