The Canadian Cattlemen’s Association (CCA) congratulates the Governments of Canada and Korea for ensuring the swift ratification of the Canada-Korea Free Trade Agreement (CKFTA) in their respective Parliaments, and setting January 1, 2015 as the date for the CKFTA to come into force.
Having the CKFTA implemented by January 1 was a critical objective for the Canadian beef sector as it enables Canada to keep pace with its U.S. and Australian competitors from a tariff reduction perspective. “Now that both Parliaments have ratified the CKFTA, it can be implemented in time to avoid the U.S. gaining another year’s tariff reduction ahead of Canada,” said CCA President Dave Solverson. “I am very pleased that the CKFTA will be in place on time to restore a competitive position for Canadian beef in the Korean market.”
Since the U.S. implemented its own FTA with Korea in 2012, U.S. beef has enjoyed an increasing tariff advantage over Canadian beef in Korea. Australia also reached a FTA with Korea in December 2013 and will also have that agreement come into effect on January 1, 2015.
The impact of the tariff disadvantage is clear. In 2002, Korea was a $40 million market for Canadian beef and its fourth largest export destination. In 2013, with a growing tariff disadvantage relative to U.S. beef, Canada exported $7.8 million. “The CKFTA signals to Korean buyers that they can resume their relationship with Canadian beef and maintain a long-term competitive position,” Solverson said.
Moreover, trade deals like the CKFTA are important because they provide the ability to get every piece of the animal to the highest value market, and that’s what maximizes the price that Canada’s producers receive for their cattle.
Under the terms of the agreement, the 40 per cent Korean tariff on fresh and frozen beef will be fully eliminated in 15 equal annual steps and the 18 per cent tariff on offals will be fully eliminated in 11 equal annual steps.
The CCA appreciates the leadership of Prime Minister Stephen Harper, Agriculture and Agri-Food Canada Minister Gerry Ritz and International Trade Minister Ed Fast for achieving this excellent agreement and bringing it into force in a timely manner.
Tabled in the Canadian Parliament in June, the final text of the agreement between Canada and the Republic of Korea was signed in September by Prime Minister Harper and Korean President Park Geun-hye. The implementation Bill C-41 was introduced in September and cleared both the Canadian House of Commons and Senate quickly with strong support by all parties.