Canada is concluding a landmark free-trade deal with South Korea. According to the government, signing an agreement with our eighth-largest trading partner will increase exports of Canadian agricultural goods and lower prices for Canadian consumers. It will provide Canadian companies the same access to South Korea enjoyed by their competitors from the United States and the European Union. Canada will benefit from free trade.
Successful ratification and implementation depends on public support. Polling by the Asia Pacific Foundation of Canada, a non-partisan think-tank, finds that public support for free trade with South Korea is weak. The lack of support is due in large part to misperceptions about our trading partner.
Notwithstanding certain economic and procedural critiques, this deal should properly be an easy sell to the public. Canadians are enthusiastic free traders. In APF Canada’s forthcoming 2014 survey, 67 per cent of respondents supported Canada entering into free-trade agreements with other countries. This is a decisive majority.
This trade enthusiasm does not extend to Asia, however. Only 41 per cent of Canadians support entering a free-trade agreement with South Korea. Canadians are wary of trade with Asian countries, and their reticence is increasing.
A free-trade deal with South Korea has some drawbacks that could be weighing on Canadians’ minds. Lowering trade barriers with South Korea will create immediate winners and losers. Exporters and consumers will benefit, but some Canadian sectors, such as the auto industry, will face increased competition.
A similar story could be told about the recent Canada-European Union trade agreement. Yet our polling finds that 67 per cent of Canadians support free trade with the EU. Clearly, there are many Canadian free traders who have not embraced a deal with South Korea.
There appear to be three primary obstacles to Canadians’ support.
First, Canadians with strong concerns about political rights and democracy are cool on a deal. In some senses, this may seem odd. According to the U.S. think tank Freedom House, South Korea has been a full-fledged democratic country since 1988 and it has a strong human-rights record. Unfortunately for South Korea, its name likely evokes thoughts of its deeply unpopular neighbour, North Korea. Our 2012 survey found that two of the most common terms associated with South Korea are “authoritarian” and “threatening.” Either the casual observer of world events has not updated their knowledge of South Korea in the past 25 years, or they are mixing up which Korea is the totalitarian state and which is an established democracy. In either case, inaccurate information is to blame.
Second, Canadians are worried that they will be undercut by South Korean labour and environmental standards. For example, respondents who agreed with the statement “Canada should only strengthen economic ties with countries that have labour standards and wages similar to, or better than, our own” were also much more likely to oppose a trade deal with South Korea. Support for the EU trade deal is not as burdened by these concerns. But again, this Canadian caution reflects a lack of accurate information. In terms of purchasing power, South Korea’s per capita gross national income is $30,970, comparable to the EU average of $33,527. Labour and environmental standards are also strong. Canadians’ worst fears of being economically undercut do not take into account that South Korea is a modern, developed economy.
Third, cultural distance plays a role in shaping opinions about South Korea. Respondents reporting concern that the Canadian way of life is threatened by “foreign influences” are distinctly negative on South Korean trade. The cultural factor does not hold back support for a deal with the EU to the same degree. Koreans and their products are still “foreign,” which makes Canadians hesitate.
What can be done to align Canadians’ free-trading instincts with support for this deal? Some factors, like the lingering feelings of cultural distance, cannot be helped in the short term. Nonetheless, proponents can help by simply getting accurate information about South Korea into the public debate. It is important that Canadians know it is a thriving democracy with a modern economy, high wages and respectable environmental standards. It is also worth pointing out that South Korea is a traditional military ally. These things may seem divorced from the economic gains of trade, but they will matter to the public.
The government cannot persuade Canadians on the deal with economic arguments alone. They do not need to sell the public on free trade. They need to sell the public on South Korea.
Eva Busza is vice-president of knowledge and research and Nathan Allen is a postgraduate research fellow at the Asia Pacific Foundation of Canada.