Canada’s pork industry is calling on the prime minister to become directly involved in kick-starting a resumption of free trade negotiations with South Korea.
In an open letter the Canadian Pork Council, Canada Pork International and the Canadian Meat Council are urging prime minister Stephen Harper to help bring closure to free trade agreement negotiations with the Republic of Korea.
South Korea has free trade agreements with Chile and the European Union and an agreement with the States is expected to receive Congressional approval within months.
Canadian Pork Council executive director Martin Rice explains, with the exception of a duty free tariff quota established in response to foot and mouth disease, pork products entering South Korea are currently subject to tariffs of 22.5 or 25 percent.
With the American and European agreements there will be quite rapid movement towards eliminating tariffs for those countries going into Korea.
Certainly before 2020 one would see those countries being close to zero if not at zero percent tariff going into Korea.
The meat business works on such small margins that, as U.S. and Europe see their tariffs decrease by a sixth, by an eighth each year, that your looking at them getting tariff cuts of at least two to three percent even four percent per year relative to us so after two years we could be looking at having a six, eight, ten percent disadvantage vis a vie Europe and the United States.
That in the meat business is enough to knock one out of the market place because it’s just too large an amount to absorb.
Rice notes South Korea is currently a 100 to 150 million dollar a year market which is expected to grow to 300 to 500 million dollars in three to five years.
He estimates if Canada fails to secure a free trade agreement with South Korea the reduction of duties charged on competing pork products entering that market will force out Canadian products within two years.
Source: Farmscape.Ca
