S. Korea-Canada FTA to Go into Effect This Week

Seoul, December 31 (QNA) – A bilateral free trade agreement (FTA) between South Korea and Canada will go into effect this week, about three months after the deal was signed, the Seoul government said Wednesday.

According to the Ministry of Trade, Industry and Energy, the Korea-Canada FTA will be implemented at the start of the new year on Thursday, South Korea’s News Agency (Yonhap) reported.

It will be South Korea’s 11th free trade pact to go into effect and will be Canada’s first-ever FTA with an Asian country.

The Korea-Canada FTA was signed Sept. 22, nearly nine years after the first round of negotiations was held in July 2005.

Under the agreement, both countries will eliminate their import tariffs on 97.5 percent of all products shipped from each country within 10 years following its implementation.

For South Korea, its automobile industry is expected to benefit the most from the bilateral free trade pact as the North American country will cut its current 6.1 percent tariffs on South Korean cars to about 4 percent.

South Korea will completely eliminate its 8 percent import tariffs on all automobiles and auto parts from Canada immediately after the deal goes into effect.

In 2013, South Korea shipped about US$2.3 billion worth of cars and auto parts to Canada while importing some $92 million worth of vehicles and parts from Canada.

For the whole economy, the Korea-Canada FTA is expected to help boost South Korea’s gross domestic product by 0.04 percent in 10 years following its implementation, the ministry said earlier.

South Korea’s agriculture industry, on the other hand, is expected to suffer a loss of about $29 million per year in production once the free trade deal with Canada goes into effect.

In 2013, South Korea’s bilateral trade with Canada reached $9.92 billion, making Canada its 25th-largest trading partner. (QNA)

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