Cheongwadae, the Korean Presidential Palace, announced on September 21 that President Park Geun-hye, who is currently making a state visit to Canada, will hold a summit meeting on the 23rd with Canadian Prime Minister Stephen Harper at Ottawa and sign a free trade agreement that would eliminate tariffs on 99 percent of currently traded items within ten years.

 

 

 

It has been nine years since the two countries began negotiating the terms of the agreement in 2005. The FTA deal will go into effect once both countries' parliaments ratify the agreement. Ahn Jong-beom, the senior presidential economic adviser, said, "The Korea-Canada FTA will liberalize trade between the two countries by 92-95 percent within three years and by 99 percent within ten years in terms of import volume."

 

With the signing of the FTA, Korea expects to gain an important benefit of eliminating automobile tariffs of 6.1 percent for its car exports. As for auto parts (6.0%), tires (7.0%), and washing machines and refrigerators (8.0%), it expects to see higher exports as the tariffs would be abolished within three to five years. 

 

Textile tariffs (an average of 5.9%) will disappear within three years, which will benefit mostly small exporters. In contrast, the 211 agricultural items have been excluded from the marketing opening discussion as of now, while 71 items will undergo gradual phaseout of tariffs over the ten-year period.