Korea, Canada initial free trade agreementUpdated: 2014-06-13 16:56:59 KST
Korea is getting a step closer to expanding its free trade bloc.
Seoul's trade ministry said Friday that the nation had initialed a free trade agreement with Canada.
The two countries promised to do the official signing in the second half of this year and if all goes well and the two nations' parliaments sign off, the bilateral pact is expected to take effect in 2015.
Over the next 10 years, each side will get rid of tariffs on nearly 98 percent of traded goods.
And while Korea's manufacturing sector is expected to get a boost from the trade pact, the local farming industry, especially those doing business in livestock products, may take a hit.
Canada will lift all of its current 6 percent tariffs within two years on Korean automobiles that make up more than 40 percent of Korea's exports to the North American country.
The Korea Trade-Investment Promotion Agency says Canada's abundance of natural resources, such as oil and natural gas, will be a boon for Korean exports of equipment associated with developing those resources.
However, import tariffs of up to 72 percent on Canadian beef will also be gradually lifted over a 15-year period.
Canada is Korea's 25th-largest trading partner, with the bilateral trade volume standing at almost 10 billion U.S. dollars.
If and when the deal does go into effect next year, Canada will become Korea's 12th FTA partner.
Hwang Ji-hye, Arirang News.
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This could be big.
"...the local farming industry, especially those doing business in livestock products, may take a hit."
(They will take a hit. It's going to be law of the jungle economics. Free trade isn't fair trade. It's all about global integration. The New World Order.)