680News, Canada

Free-trade talks with South Korea on fast track: Emerson

By Julian Beltrame

23 April 2007

OTTAWA (CP) - Trade Minister David Emerson says he’s speeding ahead with free-trade talks with South Korea despite objections from the auto sector, and expects to sign a deal this year.

Emerson says that while he understands some sectors "will wring their hands and be concerned," he’s committed to signing more free trade and investment agreements with the world.

"We’ve been spinning our wheels on free trade agreements for 10 years, it’s time we admit we’re a trading nation," he said Monday.

"My reputation will live or die on it."

The minister made the comments as Canadian trade negotiators were sitting down with their South Korean counterparts in Seoul for a week of talks that are regarded as pivotal to whether the two countries are likely to reach an agreement.

Canadian negotiators must not only hammer out mutually acceptable terms with the South Koreans, they must overcome critics in Canada. The auto sector views any deal as increasing the trade imbalance between the two countries, now at about $3 billion out of a total $9 billion in bilateral trade.

North American auto makers have long complained that South Korea is one of the world’s most closed markets for their exports.

Last year, about 8,000 North American-made autos were exported to South Korea, compared with almost one million South Korean vehicles that found their way into Canada and the U.S.

The U.S. recently signed a free trade deal with South Korea and Emerson predicted that agreement, which must still be approved by Congress, will help reverse that imbalance.

"We haven’t seen the details of the U.S.-South Korea pact, but from what I know of it it will go a long way to (opening the South Korean auto market)," he said.

"We’ve become very focused on the North American market in the auto sector and there are huge opportunities not just for assemblers, but for the parts and accessories manufacturing side of the business."

But critics remained skeptical.

Even if Canada obtains the same deal with South Korea as the Americans did, "We won’t sell one more car than we do now," charged Buzz Hargrove, head of the Canadian Auto Workers union.

The problem is that only South Korean manufacturers such as Kia and Hyundai would benefit from a mutual elimination of tariffs, which range from six to eight per cent, he said.

"It’s going to open up our market more," said Hargrove. "But our problem with South Korea has never been the tariff. They’ve been absolutely the most skilled in the world in using non-tariff barriers to restrict access to their market, and that ain’t going to change with an agreement like the one signed by the Americans."

Hargrove said the CAW has calculated that an agreement with South Korea would cost about 4,000 jobs in the Canadian auto sector alone.