BC Chamber Op-Ed: South Korean trade deal needed

In the News, Op-eds & Commentary

The following op-ed was published March 2, 2014, in the Vancouver Sun.

By: John Winter, president and CEO, BC Chamber of Commerce

For every day we wait to see a Canada-South Korea trade deal, B.C. businesses are paying a price.

A trade deal with South Korea represents a huge opportunity for B.C., which annually exports more than half of all Canadian goods headed to South Korea.

But conversely, any delay in Canada’s trade negotiations hits B.C. companies hard.

Last year, Canadian exports to South Korea plummeted by $1.5 billion – a drop felt disproportionately in B.C.

What’s driving this?

Quite simply, our inability to keep up.

Our major trading partners, the EU and the U.S., signed deals with South Korea in 2011 and 2012, respectively. These deals enable U.S. and EU companies to outcompete Canadian exporters, thanks to preferential duty treatment.

With the playing field tilted to favour our competitors, Canada’s 30% drop in South Korea-bound exports last year should come as no surprise. But it should certainly cause concern: That’s money out of the pockets of Canadian businesses and the employees that make those businesses thrive.

In B.C., the impact is amplified. South Korea is Canada’s seventh-largest trading partner, but B.C.’s fourth- largest partner.

But if B.C. is disproportionately hit by a lack of trade deal with South Korea, we also stand to gain disproportionately if and when one is achieved.

B.C. is a trading province. From resources, such as LNG, in our interior communities to the professional services in our more urban centres, opening new markets is vital to the economic vibrancy of our province. As Canada’s only Pacific province, we are uniquely positioned to take advantage of the vast opportunity in the high-growth, emerging markets of the Asia-Pacific. South Korea is just one of these emerging markets.

To grow our economy here in B.C., and across Canada, we need comprehensive, 21st-century trade agreements like the Canada-EU Comprehensive Economic and Trade Agreement (CETA), which was agreed to in principle last October, or the Trans-Pacific Partnership (TPP), which is currently being negotiated. While not multi-national like the CETA and the TPP, the Canada-South Korea Free Trade Agreement is another top-quality, comprehensive deal that Canada needs to sign, seal and deliver.

Here on the West Coast, a Canada-South Korea trade deal will be good for business in every industry and region in the province, from natural gas in Northeastern B.C. to forestry in the Central Interior, and from fish and seafood along the Coast to agriculture and agri-food from the Okanagan to the Fraser Valley. Reducing tariff barriers will give our businesses that extra edge to compete on the world stage and success abroad means jobs here in B.C.

And the benefits go further: A comprehensive free trade agreement means more than just eliminating tariffs of goods. Today’s agreements also target barriers to services. B.C., especially Vancouver, is home to many professional service providers, from accounting to engineering to mining services to natural gas services. Many of these companies are small and medium-sized enterprises.

By eliminating technical barriers, whether it’s temporary entry requirements or professional qualifications, B.C. service providers can look to expand where they do business. South Korea is a key market for our resources. By removing barriers to trade in services, this sector, which supports our resource industries here at home, will have enhanced opportunities internationally.

But perhaps the strongest reason for this deal is the bigger picture: Canada needs to get its foot in the door in Asia. We need to lay the groundwork to achieve the multi-national TPP: for B.C., the holy grail of trade deals.

With so much on the line for B.C. and Canada, the imperative for our country is clear: We need a trade agreement with South Korea and we need it sooner rather than later.

Finally, the BC Chamber of Commerce recognizes that some industries and sectors stand to benefit more than others from this deal, however we are confident that a deal will only be signed when it is to the net benefit of Canada. That is the standard our federal government holds itself to.

Moreover, we’re encouraged that the federal government recognizes that, critically, a signed South Korean deal secures Canada entrée into a growing Asia-Pacific market – itself a net benefit for businesses and Canadians alike.

The BC Chamber of Commerce commends both our federal government’s efforts toward, and our B.C. government’s support of, achieving a deal with South Korea. In B.C., whether it’s LNG or our legendary ice wine, free trade with Korea will grow jobs and prosperity for British Columbians.

So let’s get this deal done.