A Maple Leaf Foods Inc. executive says a new trade pact on pork and meat between South Korea and the U.S. would effectively price Maple Leaf and other Canadian companies out of the market.Tim Fraser/For The Globe and Mail
Canada risks losing a $1-billion export market for pork, beef and canola now that South Korea is poised to complete a free-trade deal with the United States.
"Canada will be out of business," warned Barry Sutton, vice-president of international sales for Toronto-based Maple Leaf Foods Inc. , which has a thriving business selling pork in Korea.
Under the U.S.-Korea free trade agreement, now awaiting final ratification in South Korea, duties on key competing U.S. pork products would be eliminated in 2016; currently those duties are as high as 25 per cent. According to Mr. Sutton, the move would effectively price Maple Leaf and other Canadian companies out of the market. Canada currently sells 100 tonnes of pork a year to South Korea, worth about $300-billion.
Canadian Pork Council president Jurgen Preugschas said he's baffled by the Conservative government, which says it wants to expand trade with Asia but is resisting doing a deal with South Korea. "It's a market that we have now, but we could lose it without free trade," he warned.
Canada began exploratory talks on a possible free-trade deal with South Korea six years ago. But the talks stalled in 2008 because of Korea's reluctance to open its auto market, as well as the recession and a South Korean ban on Canadian beef triggered by several cases of mad-cow disease. South Korea eventually lifted the ban on Canadian beef, but auto makers remain opposed to any deal unless they get open access to the Korean auto market.
Europe and Chile recently completed free-trade deals with South Korea, giving those countries a competitive edge over Canada. Mr. Preugschas predicted that the loss of the South Korean market would lead to lost jobs on Canadian farms and in processing plants.
Rudy Husny, a spokesman for Trade Minister Ed Fast, insisted Ottawa is working to keep and maintain export markets for pork and beef. But he said the government would only do a trade deal "if it is in the best interest of Canadian farmers, businesses and workers."
Before the recession hit in 2008, bilateral trade between the two countries was worth roughly $10-billion a year. Canada's major exports to South Korea are oil, wood pulp, nickel, machinery and aluminum. South Korea's leading exports are electrical and electronic equipment, cars, iron, steel and machinery.