Skip to main content

Prime Minister Stephen Harper is seen during a stopover in Vancouver on March 9, 2014., on route to South Korea.SEAN KILPATRICK/The Canadian Press

Stephen Harper has travelled to South Korea to seal a free-trade deal that once before slipped through his hands.

This is a deal that used to carry too many political risks for Mr. Harper's liking, back when he had a minority government. But he's beaten auto-sector opposition down to a low roar. And he's juggled that industry, as well as Korea and Japan, to revive a deal that was once dead.

Now, Mr. Harper is about to complete a big deal. This will be the first free-trade agreement with any country in Asia, a region whose rapidly expanding economic weight is crucial to Canada's trading future.

That's crucial for Mr. Harper, too. He's made expanding foreign markets part of his political brand. Until his government completed negotiations with the European Union last year, he hadn't really delivered a big deal. Now, he'll also be able point to a first deal in Asia, with Canada's seventh-largest trading partner and a potential route to other Asian markets.

But it's a deal that was there for the taking five years ago – except for the politics.

Letting it get away was bad for Canadian trade: The U.S. did do a deal, in 2011, and their advantage hurt Canadians. Canadian exports to South Korea fell $1.5-billion, to $3.6-billion.

The free-trade dance with South Korea began a decade ago, under Paul Martin's Liberals. Mr. Harper's Conservatives carried on.

The Canadian auto industry was dead set against it, however. They feared removing a 6.1-per-cent tariff on Korean cars would lead to a flood of cheap competition. GM was opposed. Japanese companies that build cars in Canada, Honda and Toyota, argued it would be unfair. Ford Motor Co. of Canada warned they might not put more money into Canadian plants.

That was enough to scare Mr. Harper's government. Talks stalled.

But the Americans went ahead. U.S. car companies were persuaded to support it. Once the deal was in place, in 2011, other American sectors had an advantage over Canadian counterparts. That's why a patchwork of Canadian interests, from pork producers to BlackBerry, pressed Mr. Harper to close a deal with Korea now.

What about the opposition? It's been whittled down. Mr. Harper's international manoeuvring helped.

When talks with South Korea were on ice, Mr. Harper made a move toward Japan, launching free-trade negotiations in 2012.

Suddenly, Japanese car makers like Honda and Toyota changed their position on Canada's car tariffs. They wanted a Japan-Canada trade deal to eliminate them – so they no longer opposed a South Korea-Canada trade deal that would do the same thing for Korean manufacturers.

That was critical, because it's Japanese companies who build small cars in Canada, like the Honda Civic and Toyota Corolla, that compete with Hyundais and Kias.

Mr. Harper met South Korean President Park Geun-hye at an APEC summit in Bali in October to press for closing the Canada-Korea deal – knowing that would increase the incentive for Japan to follow.

There was still domestic opposition, but less. GM, which produces cars in South Korea, is quiet. Chrysler chief executive Sergio Marchionne said he was persuaded last month by Mr. Harper, who noted Chrysler supported the U.S.-South Korea deal, so it can't blame Canada for a deal.

That leaves the auto workers union and Ford Motor Co. of Canada still kicking and screaming. But it's criticism Mr. Harper is willing to take on.

Ford's Canadian-produced cars don't really face Korean competition. In Canada, Ford makes crossovers like the Ford Edge and Lincoln MKX – which don't really compete with smaller Hyundai and Kia cars, and wouldn't sell big in Korea.

That means Ford is trying to protect sales in Canada, but not really Canadian jobs, said Larry Herman, of Herman & Associates. Ford's Fiesta might face tougher competition if tariffs on Korean cars are reduced, but it doesn't make Fiestas in Canada; it makes bigger models, and many are exported. "Jobs are not an issue here," Mr. Herman said.

Mr. Harper knows he still faces criticism. But it's been cut down enough that he's now willing to take the risk of circling back to South Korea to make the deal that once got away.

Campbell Clark is The Globe's chief political writer.