As Canada’s gateway to the Asia Pacific, British Columbia is a strong supporter of rules-based trade and the many benefits that free trade agreements bring for B.C. businesses and all British Columbians.
Free trade agreements remove impediments to trade and create a safer and more dependable business environment for investors. By creating a strong and diverse economy, the flow of goods and services will improve for B.C. companies, allowing them to grow their business and create good jobs and opportunities in every corner of the province.
- British Columbia and South Korea share a thriving two-way trade relationship totalling billions every year, including in the natural resources, agrifoods and seafood, international education, technology and tourism sectors.
- South Korea is B.C.’s fourth-largest goods export market and Canada’s third-largest trading partner in Asia.
- Top B.C. exports to South Korea include coal, copper, aluminum, solid wood products and pulp and paper products.
- The Canada-Korea Free Trade Agreement (CKFTA) is Canada’s first free trade agreement with an Asian country. It covers all aspects of Canada-South Korean trade, including trade in goods and services, investment, government procurement, non-tariff barriers, environment and labour cooperation.
- Upon the agreement’s entry into force in January 2015, more than 95% of South Korea’s tariff lines for industrial goods became duty-free. A further 4.2 % of tariff lines will become duty-free within five years, while the remaining 0.1 % will be duty-free within 10 years.
- Upon full implementation of the CKFTA on Jan. 1, 2032, Korean tariffs will be eliminated on 99.75% of Canada’s current exports.
- This agreement provides B.C. and Canadian exporters with preferential access to the world’s 11th-largest economy and the fourth-largest in Asia, with an annual gross domestic product (GDP) of more than $2 trillion, and a population of more than 50 million.
- Since the CKFTA came into force, B.C. has seen major gains in exports to South Korea.
- As compared to the previous year, in 2017, B.C. exports increased in: energy products (up 52%), machinery and equipment (up 48%), pulp and paper products (up 44%) and metallic mineral products (up 26%).
- The agreement gives B.C. companies a strategic entry point into Asian markets, and puts B.C. on equal footing with other nations that have free trade agreements with South Korea, such as the European Union (EU), the United States and Australia.
- Before implementation of the CKFTA, Korea’s average tariff rate on agricultural and food products was 52.7%. Once fully implemented, the CKFTA will eliminate tariffs on 99% of Canadian exports to Korea — a big opportunity for B.C. farmers.
- The CKFTA is also benefiting exporters of B.C. and Canadian wood products. Over 57% of tariffs for forestry and value-added wood products were duty-free upon implementation in 2015. Remaining tariffs on lumber and value-added wood products, currently as high as 10%, will become duty-free within 10 years, and a further 13.1% have become duty-free within the agreement’s first three years.
- B.C. accounts for the largest share of Canada’s wood products exports to South Korea.
For more information on the Canada-Korea Free Trade Agreement, visit: www.international.gc.ca/CKFTA