South Korea and Canada are expected to sign a bilateral trade pact in the second half of this year as the two nations’ chief negotiators signed the final draft of a free trade agreement in Seoul, the Ministry of Trade, Industry and Energy said in a press release on Friday.
The signing is considered the last step before the official signing as the ministry has confirmed that the agreement in hand will no longer be subject to further changes.
The draft, the English version of which can be read at the ministry’s website, will be put to legal review and then translated into Korean
“The two countries have agreed to officially sign the Korea-Canada FTA within the second half of the year, and this agreement will be implemented following its ratification by the countries’ respective legislatures,” the ministry said in a press release.
The signing process came three months after the two countries declared the conclusion of their FTA negotiations. They held 13 rounds of FTA talks since July 2005, but the talks were suspended for more than five years before resuming late last year.
According to the final draft, when the FTA between the two trade partners is signed, Korea will immediately eliminate its 8 percent import tariffs on all automobiles and auto parts from the North American country, while Canada will reduce its current 6.1 percent tariffs on South Korean products to 4 percent within 24 months.
The ministry had explained the disparity as stemming from the trade imbalance between the two countries.
In 2013, Korea shipped over 130,000 vehicles, worth some $2.23 billion, to Canada, the world’s fifth-largest market for South Korean cars.
The country, however, only imported about $92 million worth of automobiles and auto parts from Canada in the same year.
In total, Korea will completely remove its import tariffs on 98.4 percent of imports from Canada within 10 years following the implementation of the bilateral FTA.
Canada will eliminate its duties on 98.7 percent of South Korean exports over the same period.
Canada was the nation’s 25th-largest trading partner in 2013, with the countries’ bilateral trade volume reaching $9.92 billion.
The state-run Korea Trade-Investment Promotion Agency projected that autos, natural resource development, renewable energy and cultural content industries will be the main beneficiaries of the latest trade agreement for the Seoul side.
By Seo Jee-yeon and news reports