In 2013, we celebrated the 50th anniversary of diplomatic relations between Korea and Canada. Over these years, Korea-Canada relations have blossomed.
Last year marked the beginning of the next 50 years of Korea-Canada relations. To celebrate, Canadians welcomed President Park Geun-hye to Ottawa in September, marking the first time since the establishment of diplomatic ties back in 1963 that our two leaders held visits in the same year. Together, Ms Park and Prime Minister Stephen Harper witnessed the signing of a landmark free-trade agreement that will help unlock the full potential of our bilateral relations.
Historically, Korea-Canada economic co-operation has been modest, yet it has shown steady growth. We achieved our first milestone in 1981, with $1 billion in two-way trade. By 2011, it had reached $11 billion. Last year, Koreans imported $4.7 billion in goods from Canada, including minerals, mechanical products, metals and wood pulp. Likewise, Koreans exported a record $5.2 billion to Canada, primarily vehicles, electronics, machinery and plastics.
We know there is potential for these numbers to grow. Canada and Korea are leading world traders and G20 nations; ranking as the 11th and 15th largest economies, respectively. Yet, Korea is Canada’s seventh-largest trade partner, while Canada is only Korea’s 25th.
In addressing this untapped potential, the FTA should increase bilateral trade and investment, create more choices, better consumer prices and jobs in both countries.
Canada is an advanced democracy with high purchasing power, and is well integrated in the U.S. economy, making it easier for Koreans to enter the North American market. Furthermore, this agreement gives Koreans an edge over other competitors. Koreans also feel privileged to be Canada’s first free-trade partner in Asia, making our country a gateway market for Canadians. Likewise, Koreans are fully supportive of the benefits that this FTA will bring to Canada, particularly in levelling the playing field for its companies and giving Canadians access to Korea’s markets, as well as its skilled labour and network of partners and operations within the Asian business community.
Energy is one of the greatest potentials from this FTA. Korea imports 96 percent of its energy and is the world’s second-largest importer of liquified natural gas. To improve our energy security, Korean companies are seeking diversified opportunities overseas. To date, Korea’s accumulated investment in Canada is $12 billion, with 70 percent directed at the energy sector. The agreement will help strengthen this existing partnership, spurring more Korean investment in joint energy projects.
Other growth areas include the service and creative sectors. Canada offers world-class services in finance, management, engineering and information technology. In fact, last year, Koreans and Canadians developed the computer-animated film, The Nut Job, which grossed $110 million worldwide. By leveraging this type of expertise, we can lead the creative sectors together.
Similarly, Korea and Canada have complementary strengths in research and development. Canada is a world leader in science and technology research, while Korea has expertise in taking technologies to market. Korea is also one of the most innovative countries in the world. This FTA will allow Canadian research to benefit from Korea’s capacity for commercialising products, and to use Korea as a test bed for expanding sales to the global market.
As always, these outcomes will depend on the active and pre-emptive efforts of businesses in leveraging the established momentum. That’s why the Korean government is promoting further business engagement, such as the re-launch of the Korea-Canada Business Symposium last September. This conference helps stakeholders understand the FTA, forge new partnerships and make the most of the opportunities before us.
Moreover, I would like to encourage Canadian companies to stay abreast of Korea’s changing consumer trends, to participate in trade missions, meet with their Korean counterparts and get to know how business is done in Asia.
The Korea-Canada Free Trade Agreement is one of the most significant developments in our relationship over the past 50 years. It is also at the heart of a new strategic partnership to which our leaders have committed. Just as the Visa Exemption Agreement of 1993 solidified our people-to-people relations, this 21st-Century FTA will lay the foundation for a new era of mutually beneficial bilateral relations.
Hee-yong Cho is the ambassador of Korea. Reach him at (613) 244-5026.
