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"We cannot wait for the elusive comprehensive, high quality agreement to revive from its coma,” said Edouard Asnong, chair of Canada Pork International, remarking on the lack of discussion and movement in negotiations with South Korea over the last two years. “We don't have time for more process. Our third-largest market is at risk. We need action now."
The US refers to the Korea-US Free-Trade Agreement (FTA) as the most important FTA they have negotiated in nearly 20 years — and an agreement with Korea is no less important for Canada, said Martin Rice, executive director of the Canadian Pork Council.
Other countries have negotiated FTAs with South Korea and are poised to benefit at Canada's expense, Jim Laws, executive director of the Canadian Meat Council, pointed out. "Chile has come from nowhere to be third-largest supplier to Korea,” he said. “This was a direct result of conclusion of the FTA. If Chile had a larger herd, they would be an even more important supplier to Korea. And now Korean customers are booking business with US exporters in anticipation of the Korea-US FTA. The US expects a seven-fold increase in the volume of their exports to Korea."
Tariffs on pork imported into the very price-sensitive South Korean market are in the 22.5% to 25% range. These tariffs are being phased out over 10 years or less for the US (and the EU).Unless Canada has the same tariff preferences, it will lose out on $500 million of expected growth in its exports to Korea. And Canada’s second place in what is its third-largest market, worth more than $138 million in 2008, will be little more than a memory.
"With delays and complications in the Doha Round, free-trade agreement negotiation appears to be the only game in town," Rice said. "This may be the case for the time to come. We need to harvest all the low hanging fruit and access that we can as soon as we can.
"The Korean market is also changing structurally — in the wake of a major outbreak of Foot and Mouth Disease — and increased demand from famine-plagued North Korea,” he added. “We cannot compete with the price disadvantage we will face without FTA access."
"Telling government not to conclude an FTA with Korea until certain objectives are met is not acceptable to Canada's pork producers and processors," Asnong concluded.
