Agriculture producers applaud free trade deal with South Korea

Will Kingma has one complaint about the Canada-South Korea free trade agreement announced by the federal government this week. It didn’t happen sooner.

Will Kingma has one complaint about the Canada-South Korea free trade agreement announced by the federal government this week.

It didn’t happen sooner.

“It should have been done earlier, but at least it’s done and we’re moving forward on it,” said the owner of Kingdom Farms near Bentley.

Kingma, who is a director with Alberta Pork, said it was critical that Canada follow the United States’ lead in striking a deal with the Asian country to eliminate tariffs on pork. The value of Canadian pork exports to South Korea had dropped from $223 million in 2011 to $129 million in 2012 and $76 million last year.

“We are playing a little bit of catch-up, but at least we’re back on the table,” said Kingma.

Doug Sawyer, a Pine Lake-area beef producer and member of the Canadian Cattlemen’s Association’s executive committee, echoed Kingma’s assessment.

“One of the biggest issues for the Canadian industry was the U.S. got a trade deal with them two years ago. So they’re two years ahead of us in lowering the tariffs.

“We were at a do-or-die point.”

Canadian beef exports to Korea, which were $40 million a year prior to the BSE crisis, reached just $7.8 million last year — with the United States’ favourable trading position preventing this figure from growing.

Terry Young, a Lacombe-area farmer who sits on the Alberta Wheat Commission and the Alberta Canola Producers Commission, said the benefits of liberalized trade with South Korea will extend beyond the livestock sectors. Not only will domestic demand for feed grain likely increase, canola and cereal grains grown in Canada will now face the same tariffs as competing products from the United States and other countries with trade agreements with South Korea.

Exports of Canadian canola to South Korea has ranged from $60 million to $90 million in recent years, while annual wheat shipments averaged $273 million from 2010 to 2012.

“As a producer, or an industry, we’re always looking for a level playing field,” said Young.

In addition to helping the Canadian agriculture industry maintain and grow its share of the market in Korea, the agreement should widen the door for expanded trade with other parts of Asia. This is important because the standard of living is rising there, and with it demand for protein and other food products, said Kingma and Young.

Market diversification protects livestock producers from border closures and other trade impediments, said Sawyer, but in the case of Asia it also increases the value they can get for their animals. He explained that demand for specific parts of a beef cow varies from country to country, so shipments can be customized to the tastes of each market.

“We can add, literally, hundreds of dollars to the value of a beef animal by getting an extra buck or two on this product, an extra buck or two on that product — by getting them sent to the highest value market.”

Young applauds the federal government for its efforts to negotiate international trade agreements, which he said are critical for Canadian agriculture — and the broader economy.

“It’s a renewable sector, and it’s fundamental to the economy.”

Sawyer agreed.

“They recognize the value of the agriculture industry within Canada, and particularly in Alberta, as a real economic stabilizer and a big economic player.”

The trade deal with South Korea covers both agricultural and non-agricultural products. Included is a phase-out of the 6.1 per cent import duty on vehicles and auto parts manufactured in South Korea.

Information from Hyundai Auto Canada Corp. provided by Gary Moe Hyundai in Red Deer pointed out that the agreement has yet to be ratified and will have no immediate impact on the Korean automaker’s business in Canada. It added that much of the product Hyundai sells in Canada is manufactured in North America, and is not subject to the import duty.

hrichards@bprda.wpengine.com

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