With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/325830
142 BCBusiness July 2014 C anada's federal government is touting its latest free-trade agreement with South Korea as a pact that will boost Cana- dian exports to its seventh- largest trading partner by 32 per cent and add $1.7 billion to the Canadian economy. More importantly, it's Canada's first trade agreement in Asia at a time when we're seeking to expand trade across the continent. The Korean FTA sounds promising, but is this a really big deal for B.C.? Fewer than 18 per cent of our read- ers surveyed thought the agreement would benefit their companies, and while 49 per cent said they supported the deal, nearly 44 per cent said they weren't sure. Perhaps one reason the agreement made few headlines in this province is that British Columbians haven't come out loudly against it, as many Ontarians have in Canada's automotive heartland. Ford Motor Co. Canada's president and CEO, Dianne Craig, said in a statement that South Korea "will remain one of the most closed auto- motive markets in the world" under the agreement, which will eliminate Canada's 6.1 per cent tariff on imported Korean cars. Canada imported 124,000 cars from South Korea last year, while shipping only about 2,000 cars the other way. That reflects a larger trade imbalance between the two countries that sees Canada selling about $3 bil- lion in products to South Korea while importing $7 billion. B.C.'s natural resources industries, however, stand to gain from the pact. Canada sold $1.8 billion worth of metals and minerals to South Korea in 2012, representing nearly half of all Canadian exports to that country. Karina Briño, president and CEO of the Mining Association of B.C., says free-trade deals and the lower- ing of non-tariff barriers help her industry. "All of that helps facilitate shipment and movement of prod- uct," she says. Trade barriers, however, don't concern her as much as transportation barriers. "It's about access to ports, access to rail and the ability to count on your products to make it to where the client is," she says. And while the pact with South Korea will lower the price on Canadian exports by a few percentage points, that really only brings us into line with our competitors. "The EU signed a trade pact with South Korea in 2011. The U.S. signed one last year, and Australia signed one this year," says HSBC's chief economist, David Watt. "So some of the major trading nations have already opened up trade with a key Asian trading part- ner and lowered trading barriers." Canada has finished negotiations with South Korea but the deal won't be signed and in force until likely next year. • Eastern Promise Are you supportive of the recent free-trade agreement with South Korea? Do you think the free-trade agreement with South Korea will have a positive impact on your company? A free-trade agreement with South Korea breaks new ground YES 59.6% YES 17.6% NO 7.1% NO 34.0% NOT SURE 43.6% NOT SURE 48.4% n=589 n=597 p138-146-HSBC_advertorial.indd 142 2014-05-29 10:07 AM