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Canada, South Korea Reach Trade Agreement

H.S. Borji
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Canada, South Korea Reach Trade Agreement

In an effort to diversify Canada’s export sector, the Canadian government this week reached a historic trade agreement with South Korea. The deal, which promises to expand Canadian exporters’ footprint in the Asian marketplace, put an end to nearly a decade of choppy trade negotiations between Canada and the Asia-Pacific region.

The deal, which is expected to boost Canada’s export of beef products and South Korea’s export of automobiles, will eventually phase out 98.2 percent of South Korean tariffs and 97.8 percent of Canadian duties, the Canadian government said. The trade agreement could boost Canadian GDP by $1.7 billion annually.

“This agreement is great for both our countries,” Canadian Prime Minister Stephen Harper said Tuesday. “It will create jobs and opportunities for Canadians today, and just as importantly, for the generations that follow.”

Prior to the agreement, Canada’s exports to South Korea had declined 7.5 percent to $3.4 billion, according to government data.

The trade deal, which is Canada’s first with an Asian country, is the first step toward diversifying Canada’s export market. As of 2013, the United States was by far Canada’s biggest export destination. More than three-quarters of Canadian exports, a market valued at $357.5 billion, went to the US. China, which accounted for 4.4 percent of Canadian exports last year, was a distant second.

The news was unable to bolster the Canadian dollar, which has been declining since last week’s payrolls report. The USDCAD pair, having gained around 1.3 percent since last Thursday, continued to strengthen. As of 14:45 GMT, the pair was trading at 1.1137.

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