Canada won’t benefit from trade accord with Korea, studies say
19 September 2006
Canada Won’t Benefit From Trade Accord With Korea, Studies Say
By Alexandre Deslongchamps
Sept. 19 (Bloomberg) — Canada probably wouldn’t benefit from a free trade agreement it’s negotiating with South Korea as part of a strategy to increase business with Asia, according to two studies posted on the Canadian trade ministry’s Web site.
The studies focused on the automobile industry, which accounts for about a fifth of trade between the two countries, and found that a trade accord would have either a negligible or a negative impact on the Canadian economy. Still, the studies are more favorable than others released today by the Canadian Auto Workers Union, saying a pact may cost Canada 4,000 jobs.
Even with the most positive scenario, Canada breaks even - - no advantage shown by the government's own studies,'' Canadian Auto Workers President Buzz Hargrove told reporters today in Ottawa after meeting with Trade Minister David Emerson.Our studies show an incredibly negative impact.’’
An independent study the government commissioned found that lower car prices for Canadians would be offset by a loss of tariff revenues and less production by automakers. As a result, Canada would lose C$16 million ($14.2 million), wrote Johannes Van Biesebroeck, an economics professor at the University of Toronto and author of the study.
The other study, by government officials, found the impact of the trade agreement would be relatively small.''
Those and the union's studies come as Canada and South Korea prepare for their seventh round of trade negotiations in Ottawa during the last week of this month. Canada wants to sign an agreement with South Korea because the country is agateway’’ to northeast Asia, the trade ministry’s Web Site says.
Emerson told reporters yesterday that the South Korean market holds tremendous opportunity for our service sectors, for our agricultural and natural resource sectors, as well as manufacturing and technology.''
While the U.S. is also negotiating an agreement with South Korea, creating pressure for Canada to complete one, the Canadian government isnowhere near a free-trade agreement with Korea,’’ Emerson said.
