Export increases under the Canada-Korea Free Trade Agreement

The Canada-Korea Free Trade Agreement (CKFTA) entered into force on January 1, 2015. Since then, it has made Canadian products more competitive in the Korean market. In the CKFTA’s first five years of implementation, Canada’s exports have increased across a number of sectors, including in agriculture, fish and seafood, and industrial goods. Canada’s exports to Korea increased to $7.6 billion in 2019, up from $6 billion in 2014.

Canada remains committed to promoting the CKFTA so that businesses can take advantage of the opportunities that flow from the Agreement.

Agriculture

Korea’s market for agriculture and agri-food holds enormous potential for Canadian exporters, especially as Korea’s middle class continues to grow and seek high quality products. Since January 1, 2019, 70% of Canada’s agricultural exports are eligible for duty-free access to Korea. By 2029, 99% of Canadian exports in this sector will be eligible for duty-free treatment.

Canada’s exports of agriculture and agri-food to Korea increased from $595 million in 2014 to $860.2 million in 2019^{Footnote 1}.

Examples of Canadian products that have benefited from the CKFTA include:

• Canada’s exports of pork and pork products grew from $91 million in 2014 to $173.8 million in 2019 (increase of 91%), having benefited from reductions of Korean tariffs from up to 30% to a maximum of 13.5% in 2019;
• Canadian exports of pork and pork products to Korea will be tariff and safeguard free as of January 1, 2028.
• Canada’s exports of crude canola oil grew from $56.7 million in 2014 to $136 million in 2019 (increase of 140%), having benefited from the reduction of Korean tariffs from 8% to 1.4% in 2019;
• Korean duties on Canadian exports of crude canola oil will be eliminated on January 1, 2021.
• Canada’s exports of beef grew from $16 million in 2014 to $45 million in 2019 (increase of 182%), having benefited from reductions of Korean tariffs from up to 72% to a maximum of 48% in 2019;
• Canadian exports of beef to Korea will be tariff and safeguard free as of January 1, 2030.
• Canada’s exports of french fries grew from $5.5 million in 2014 to $39.3 million in 2019 (increase of 619%), having benefited from the elimination of Korean tariffs of 18%.
• Canada’s exports of dog and cat food grew from $6.1 million in 2014 to $24.8 million in 2019 (increase of 308%), having benefited from the elimination of Korean tariffs of 5%.

Fish and seafood

Korea is a lucrative market with significant potential for Canadian fish and seafood producers. The CKFTA is creating important market access opportunities for the Canadian fish and seafood sector as a result of the reduction and elimination of Korea’s tariffs on all fish and seafood products. Since January 1, 2019, 87% of Canadian exports in this sector are eligible for duty-free access to Korea. All remaining Korean tariffs on Canadian exports in this sector will be eliminated by 2026.

Canada’s exports of fish and seafood to Korea more than doubled from $59 million in 2014 to $158.7 million in 2019. For example, Canadian exports of lobster grew from $36.7 million in 2014 to $138.9 million in 2019 (increase of 279%), having benefited from the elimination of Korean tariffs of 20%.

Industrial products

Industrial goods cover the majority of Canadian exports, including sectors such as:

• aerospace
• automotive
• information and communications technology
• metals and minerals
• chemicals
• plastics
• pharmaceuticals
• industrial machinery

Since January 1, 2017, 99% of Canadian exports of industrial goods are eligible for duty-free access to Korea. All remaining Korean tariffs on Canadian exports of industrial goods will be eliminated by 2024.

Korea imported $6.1 billion in industrial goods from Canada in 2019, up from $4.7 billion in 2014.

For example, the following Canadian exports have benefited from the elimination of Korean tariffs:

• Pharmaceuticals, from $45 million in 2014 to $116.3 million in 2019 (increase of 159%), having benefited from the elimination of Korean tariffs of 8%;
• Scientific instruments, from $86.4 million in 2014 to $108.2 million in 2019 (increase of 25%), having benefited from the elimination of Korean tariffs of 8%.
• Plastics, from $23.1 million in 2014 to $57.2 million in 2019 (increase of 148%), having benefited from the elimination of Korean tariffs of up to 8%;
• Petroleum coke, from zero in 2014 to $34.1 million in 2019, having benefited from the elimination of Korean tariffs of 5%;
• Tires, from $2.2 million in 2014 to $32.1 million in 2019 (increase of 1379%), having benefited from the elimination of Korean tariffs of 8%.