Pork producers push for free-trade talks with S. Korea
Jan. 13, 2011
by Bryan Salvage
OTTAWA, ONTARIO – The Canadian government is being urged by the Canadian Pork Council (CPC), Canada Pork International (CPI) and the Canadian Meat Council to resume the free-trade agreement (FTA) talks with South Korea that have been interrupted since 2008. In light of the recent agreement between South Korea and the United States, the Canadian pork industry is very concerned that postponing the FTA talks any further will seriously affect the competitiveness of the pork industry and all other Canadian sectors exporting to South Korea.
"A free-trade agreement with South Korea is the most crucial potential free-trade agreement that can be completed for the Canadian pork sector,” said CPC's chair Jurgen Preugschas. “We are very supportive of the government's efforts to finalize the Canada-EU comprehensive Economic and Trade Agreement and the long-term potential of the agreement for the pork industry. However, the lack of progress on a FTA with Korea is having a noticeable effect on our current market share.
“An American study evaluated the benefits for the US pork sector of an FTA between the US and Korea at US $10 per hog,” he added. “The Canadian context is different but the impact should be somewhat similar."
"All of our key competitors have previously reached or have negotiated FTAs with Korea,” said Edouard Asnong. CPI president. “It is fair to assume that Canada's current pork trade with Korea, valued at $125 million in 2009, would completely disappear. Chile has become a significant player in Korea since signing an FTA a few years ago, the EU has an agreement that will come into effect on July 1, 2011, and the US finalized a deal in December 2010 that will most likely be approved by the US Congress. Canadian pork exports are already suffering from the lack of FTA discussions as strategic alliances are being developed between Korean customers and suppliers from countries where FTA's are being finalized.”
"If Canada is lagging behind the US and the EU in the implementation of the tariff reduction schedules, the negative impact on Canadian exports will carry throughout the tariff reduction period. Canada will lose its status as a competitive supplier to South Korea for the next decade due to this tariff gap, so it is crucial to resume and finalize the FTA as soon as possible," added Brian Read, president of the Canadian Meat Council.
"The size of the Korean Market, with a population of 50 million people, and the high value for the items sold there, such as chilled shoulder butts and bellies, is significant enough to have a major impact on Canadian hog prices and jobs in both the farming and processing sectors should Canada lose access to the Korean market, Asnong said.
South Korea is not a market that can be replaced overnight and the Canadian pork industry's long-time commitment to the Korean market will be impossible to maintain, he added.