South Korea deal can't appease 'narrow interests' of auto sector: Ed Fast
Published Sunday, March 9, 2014 10:57AM EDT
Last Updated Sunday, March 9, 2014 12:07PM EDT
International Trade Minister Ed Fast says his job "isn't simply to promote the narrow interests of the auto sector," in response to concerns from automakers that a pending free trade deal with South Korea will squeeze their already troubled industry.
Fast played coy about the deal on CTV's Question Period, saying only that although he and Prime Minister Stephen Harper are headed to South Korea and reports suggest a signing ceremony is expected on Tuesday, "negotiations haven't quite concluded."
"I'm not going to pre-judge the outcome of his visit, but we're going there with optimism that we'll be able to conclude negotiations," Fast said in an interview that aired Sunday.
He said a deal with South Korea is critically important to ensure Canadian companies can do business there. Canadian exports have fallen off dramatically since South Korea's free trade deals with the United States and the European Union came into force.
"This is very important for Canada. We need to make sure that Canadian businesses have a level playing field upon which they do business," Fast sad.
The deal with South Korea concludes 10 years of negotiations, and comes on the heels of an historic free trade deal that the federal government reached with the European Union last fall.
While Japanese automakers have come out in favour of the Canada-South Korea deal, Ford of Canada chief executive Dianne Craig recently slammed the U.S. deal signed in 2012, calling it a "disaster" for the auto sector.
Automakers fear that if the six per cent tariff on car imports is lifted, Korean cars will flood the Canadian market and consumers will turn their backs on Canadian-made brands.
"We want a free-trade agreement that's good for all sectors, but on autos particularly it's disadvantageous," Ontario's economic development minister, Eric Hoskins, said recently. "I haven't been given information to suggest that the improvements that we've asked for have been addressed."
Fast insists, however, that he has consulted with the auto sector and "we believe the outcome that we are hoping to achieve will be a balanced one, it will reflect many of the concerns raised by the auto industry.
"But understand that my role isn't simply to promote the narrow interests of the auto sector itself. My role is to promote the national interest. Virtually every other sector of our economy has told us this trade agreement is absolutely critical. Many of them have been losing market share in Korea."
A trade agreement with South Korea is considered vital for the agricultural sector, for example, which is often hampered by high tariffs in the Korean market, as well as other issues such as sanitary standards that are often applied on an arbitrary basis, Fast said.
Exports of agricultural products have also declined dramatically, he said, in the wake of the U.S. and EU deals. Exports dropped by $1.5 billion in the first year after those deals came into effect, he said.
Once the deal is signed, Fast said, it will have to be reviewed by lawyers, translated into three languages and go through each country's approval process. He hopes the agreement would come into effect "early next year."
"We're hoping to get it done on an expedited basis."
South Korea is Canada's seventh-largest merchandise trading partner. However, current trade relations heavily favour South Korea, with exports to Canada totalling $6.3 billion in 2012, compared to $3.7 billion going the other way.
With files from The Canadian Press