OTTAWA -- The Liberal Party will oppose the Conservatives' attempts to negotiate a free-trade agreement with South Korea unless the deal eliminates non-tariff barriers and opens up market access to cars and trucks made in Canada.
In taking such a stand yesterday, party leader Stéphane Dion is siding with North American auto makers and unionized auto workers in their opposition to a free-trade deal.
"Canada's manufacturing sector cannot afford any more mistakes from this Conservative government," Mr. Dion said from Windsor, Ont., where he met with auto industry leaders.
International Trade Minister David Emerson has said he wants to finalize a South Korea deal this year, despite concerns from auto makers, shipbuilders and beef exporters.
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Canada has been negotiating with South Korea since July, 2005. But the United States beat Ottawa to the punch, signing a deal with the emerging economy this spring, even though they just started negotiations in February, 2006.
Liberals will back a free-trade pact only if it "substantially eliminates" tariff and non-tariff barriers, and includes an effective dispute-settlement mechanism that will preclude Seoul from creating new non-tariff barriers down the road, Mr. Dion said.
"Any trade agreement that does not ensure this is not a real free-trade agreement at all," Mr. Dion added.
Mr. Emerson has said that he expects Canadian auto makers would benefit from a South Korea free-trade deal because it will open new markets for them.
For now, most car makers in North America find it next to impossible to penetrate the South Korean market because of rules that deter South Koreans from buying foreign automobiles. For example, buyers face tax audits if they purchase foreign cars. And South Korea's licence plates are a different size than the rest of the world, requiring a separate production run for foreign companies trying to sell their cars there.
South Korea's car sales in Canada, on the other hand, are substantial.
Last year, Kia Motors Corp. sold 29,569 vehicles in Canada, for a 1.9-per-cent share of Canada's market. And Hyundai Corp. sold almost 60,000 vehicles, for a market share of about 5 per cent.
The Canadian Auto Workers union has called for an auto-pact type of arrangement with South Korea, which would limit that country's sales in North America to the same amount of North American vehicles allowed into South Korea.
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