Netizens Angry as Korea signs FTA with Canada

Netizens heaped scorn on the government after the announcement that South Korea and Canada signed a free trade agreement that would clear the way to sell more Korean cars overseas and more Canadian beef domestically. Online, comments criticized politicians for working to help Hyundai-Kia at the expense of poor rural farmers. Similar opinions were common during the passing of the recent Korea-U.S. free trade agreement and talks about a Korea-China agreement.

Article from Seoul Shinmun:

Korea-Canada FTA ratified; Benefit for Korea Auto Industry, Blow for Livestock Industry

A Korea-Canada free trade agreement (FTA) was ratified on March 12th in what is seen as a move that will benefit South Korea in automobiles, auto parts, textile, machinery and electronics and will allow Canada to profit in livestock, including beef and pork.

Canadian Prime Minister Stephen Harper and President Park Geun-hye held a joint press conference to announce the passing of the FTA

Canadian Prime Minister Stephen Harper and President Park Geun-hye held a joint press conference to announce the passing of the FTA

Observers say that the Seoul-Ottawa pact is not much different from previously concluded agreements Seoul signed with major economies in that the bilateral agreement can be seen as a “boon to auto and home appliance industries.”

For South Korea, the biggest beneficiary from the latest FTA is the auto industry.

Analysts say that the South Korean government has channeled its efforts into knocking down the maximum 6.1-percent tariff Canada imposes on Korean cars.

The agreement shows that Canada will phase out the current 6.1 percent auto tariff within two years after the FTA takes effect, allowing cars of Korean origin to go into the Canadian market without tariffs.

This phase-out in the accord with Canada will puts Korea at an even greater advantage in auto exports than the Korea-U.S. FTA, which provided for the removal of U.S.-imposed 2.6% tariffs on Korea-made cars five years after ratification.

Another upside for South Korea is found in machinery and electronics. Under the FTA, Ottawa is set to abolish 6% refrigerator tariffs three years after the FTA’s comes into effect and 8% washing machine tariffs upon the agreement’s ratification.

Currently, wireless phones, semiconductors, steel and petroleum products are exported to Canada without tariffs. This raises the prospect that the FTA will result in most machinery and electronics exports to Canada entering the country without any tariff.

Meanwhile, Korea will have to open its agriculture and livestock market to Canada, which has pushed to eliminate the current 40 percent tariffs South Korea has slapped on beef, and to further open the market to other agricultural products.

Under the freshly-inked FTA, South Korea is obligated to remove tariffs on beef, pork belly and other pork parts within 15 years, 13 years and 3 years respectively.

Since South Korea has already signed free trade agreements with the United States and Australia, Canadian beef and pork are expected to begin competing with imports from the other two countries for a greater market share in South Korea.

As a consequence, the Seoul-Ottawa FTA will deliver another blow to local livestock farmers. The Assistant to the Vice Minister of Trade and Natural Resources told a press conference in Sejong, South Chuncheong Province, “The local livestock industry will take a beating. Although it’s hard to talk in specifics about measures to cushion the blow, I pledge to draw up the measures in consultation with other government ministries.”

Last year, Canada posted 91 million dollars worth of meat exports to South Korea. That number makes up just 1.9 percent of South Korea’s meat imports, explained in large part by the stiff import tariffs on Canadian meat, which ranged from 3 percent to a staggering 72 percent. The FTA signing can be seen as a significant success for Canada

Comments from Naver:

suwa:

So the country becomes the Kingdom of Hyundai-Kia.

kims:

And the rich get richer while the poor get poorer.

poon:

So those poor bastards sacrifice for the sake of those bastards who have so much.

kass:

Who are we living for? For the corporations, apparently.

yaho:

One day all of the FTA corruption will be exposed. History will be the judge…

icem:

Please allow us to ride in a European car, tax-free! How much longer will we protect the domestic automakers at the expense of our consumers?

muld:

Our farmers and fishers are frustrated at the way their industry has been distorted. The consumers are also frustrated. I think if we could just reform the middle-men for farmers and fishers, then we would be well able to respond to the FTA. We know that imported beef and pork can’t rival hanu or native pork when it comes to taste. But it’s just too expensive. The farmers cry about plummeting prices while the consumers always complain about the lack of price decreases. We have to reform the middle-men.

good:

I have thought about what compensation the Lethal Weapon [pun on Hyundai-Kia Motors] has made for selling more cars overseas at the expense of our farmers’ livelihood up until now. The only thing for us seems like the less safe cars for domestic pushover customers than the cars they export? It’s pitiful. Upvote if you agree.

lava:

I feel sorry for the old farmers in the countryside. No reward for their support of Saenuri.

thec:

Every time we sign an FTA they say that the sacrifice from our farmers will add up for our auto manufacturers as they sell cars tax-free overseas. But the only thing adding up is the price of cars domestically every year. Thank you, Hyundai-Kia Motors.

dw37:

The government only takes care of Hyundai-Kia. They’ve done well enough. How about giving a little bit back to the people for a change? No, they just treat us like fools. It just gets tougher and tougher for the farmers.

suwa:

Our primary [farmers and fishers] industries are also important… When you are full of regret later, there won’t be anything you can do, eh, Miss Park [lit. “chicken”]?

knso:

So the people sacrifice and the corporations count their winnings.

hana:

The winners: Samsung Electronics, LG Electronics, Hyundai-Kia, etc. The losers: everyone else.

tsun:

We should already be helping out the farmers with the money Lee Myung-bak promised when he signed the last FTA.

nama:

And so the exterior seems to improve while the core rots.

lees:

Good for Hyundai-Kia, but bad for pig farmers like me.

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  • chucky3176

    Reading comments from Canadian newspapers, the reactions on the FTA with Korea are pretty much same as the ones shown above from Naver.

    The effects (both the positives and negatives) of the FTA agreements are greatly exaggerated, as shown by previous agreements with Chile, US, and EU shows. So far, the effects have been slightly positive for Korea, with strong trade surpluses with the US, but massive deficits with Chile and EU. But keep in mind that it’s much too early to conclude all the effects, since much of the barriers and agreements are still being dismantled. It won’t be for years, until we’re sure where we stand with these effects. It was only reasonable that Korea which is stronger in manufacturing exports would show positives first, before the West, who are much stronger in services sectors which takes longer to setup.

    Someone commented above:

    “Please allow us to ride in a European car, tax free! How much longer will we protect the domestic automakers at the expense of our consumers?”

    That’s nothing to do with tax. It’s the ancient complicated multi-layer distribution systems. And also it’s the greedy importers who pocket all the tax savings, and don’t pass on the savings to the consumers. Instead, they jack up the prices to keep the illusion that foreign imports are luxury goods. FTA has not helped the Korean consumers to purchase goods with lower prices. The Korean consumers are still naive and easily fooled into belief that foreign goods = luxury brands, so more expensive the goods are, they must be better quality. Koreans do not prefer cheap, but quality goods. They prefer expensive imported brands period. Parents are now buying their grade school kids, $700 erasers, $1000 backpacks, and $2000 gold pens, to keep up with the other kids in their never ending race to be the best.

    • redwhitedude

      That “tax” is the very thing that is considered a trade “barrier”.

    • hang

      Western Canada, where agriculture is strong, is quite pleased with the deal. Eastern Canada, where they still rely on their inefficient vehicle manufacturing sector, isn’t quite as pleased.

      • chucky3176

        Which is just nonsense, because 85% of Ontario vehicles are exported to other countries. Only 15% stay in Canada. Another fact, 60% of Korean cars already arrive in Canada tax free, from the southern United States where manufacturing labor rates are far cheaper than South Korea, through the North American FTA called the NAFTA. The six percent tax elimination on Hyundai Accents and Kia Rio’s aren’t going to make much difference to Canadian auto landscape, when Hyundai Sonata’s, Santa Fe’s, and KIA Optima’s (the big price ticket items) are manufacture in the United States.

        Some of the arguments I read were so convoluted, it’s pure comedy gold. Example, the Globe and Mail had an article published couple of days after the deal was announced, titled “Selling South Korea to Canadians”. It seems many Canadians are confusing South Korea with either North Korea or China.

  • Beef Stick Lover

    Korean beef is stupidly overpriced and of inferior quality. Even the premium hanwoo. I heard people rave about it here, when i finally got around to trying it I was so underwhelmed. It had the taste and texture of a chuck steak in a Dennys. I could not believe the price they were charging for it. Competition and varied product is only going to improve the avalibility of decent beef.

    • chucky3176

      It probably wasn’t Hanwoo. It was probably US beef falsely labeled as Hanwoo to rip off the consumers with much higher prices. 90% of all beef in Korea labeled as Hanwoo, are imported beef.

      • Beef Stick Lover

        It was at the Park Hyatt near Samseong station. They aren’t serving fake Hanwoo at the Hyatt.

        • chucky3176

          Doesn’t matter. The beef industry is so mixed up, even all the high end sellers don’t really know where the meat really comes from. All they got is word from the resellers that it’s Korean beef, not some cheap import. Not just one resellers, but a multi layers of resellers. Good luck trying to trace the products.

          • Jerry

            Fact: Korean beef is unquestionably the best. Any facts to the contrary are false.

          • chucky3176

            Fact: Yes, you’re in an idiot, it you can’t accept the fact that it’s better than US beef.

          • Beef Stick Lover

            You obviously know nothing about beef and you are pretty damn silly the way you refuse to accept a modicum of negativity against something Korean. Have you actually ever been to 5 star restaurant before? Most places nowadays if you are ordering off the tasting menu will show you the cut before they cook it. Any chef worth his salt knows exactly what produce he is using, where it has come from and certainly wouldn’t be dealing with someone passing off fake steak. Also, hanwoo, like other premium beef whether it be Wagyu Kobe, Fassone or Lomo, can be identified as fake in about 2 seconds flat upon tasting by even a Commis Chef on his first day of training. The idea that a branch of the Hyatt is selling fake Hanwoo is so silly that it makes you look stupid for suggesting it.
            I’ve eaten at more Michelan star restaurants then most people my age (and isn’t it funny there isn’t a single rosette on the entire Korean peninsula) and you sir are talking out your ass.
            Accept it. As far as beef goes, Korea is not well known or regarded. And for good reason.

          • Ed

            I have eaten real Hanwoo, and I have eaten American steak all my life. And by a mile, Korean beef wins, no contest. American beef is a mass produced hormone injected junk. It’s seriously embarrassing to even suggest it’s anything else. Heck, any beef other then North American garbage, is way better. I’ll take grass fed Australian-NZ beef any day of the week over drug filled American poison.

          • Paulistano

            Well, man, you sound very confident. I would be happy if you provide a source of your claming. Your persona taste and your palate doesn’t count.

            I didn’t know what was Hanwoo untill know, you were right when you said korean beef is not well known, Kobe beaf is much more recognised. But one thing I don’t think it’s true that Hanwoo beef is bad, from a 30 minutes research on internet, you can know that Hanwoo is pretty premium and it’s recognised that the beef is pretty tasteful. Maybe your right that the korean beef is overpriced, but surely it’s not an inferior quality.

            Oh, between you personal taste about this and a specialized source, I prefer to stick with the second option.

            Edit: If you are an american, please hide yourself. Anything it’s better than american hormone-altificial-beef. I wouldn’t trust north-american beef since they give corn as primarily food for mass production, aarrhhgg. If you are not american, please just ignore.

          • Paulistano

            Errrrrr. I have to disagree with you this time chucky. It matters for many people. The high end seller KNOWS where the meat come from and he knows that the meat is premium. Or he is better to be prepared for a sue from costumers.

      • chris

        thats the same with Japanese wagyu Kobe beef. Kobe beef comes from Kobe City, and cannot be reproduced else where. thats why on menus overseas, they will write “Kobe-style beef” which is prob. just a hybrid mix of regular Japanese wagyu and American angus. unless you go straight to the source, you’ll probably eating some fake/ripoff meat.

        • Paulistano

          That’s not true I think. wagyu is a especific cow specie where they have more fat in their meat. I know that many japanese people in Brazil have Wagyu-Kobe cattle, they are very expensive because the farmer brought directly from Japan, so the meat per se is the same, not fake. The only difference is that in Japan, the Wagyu cow has much more luxury treatment (I think you know what I mean, right?) making their meat much more tasteful and soft and here they can’t receive these treatments due to financial reasons. But it’s still Wagyu beef and it’s very expensive here and not a rip-off.

          • chris

            no. Kobe Beef is a specific type of cow called Tajima Cattle which is bred in Hyogo (prefecture where Kobe is located). in order for meat to be labeled Kobe Beef, it has to be from Tajima Cattle from Hyogo, be bred/fed and slaughtered in Hyogo prefecture. it has all these other marbling ratios and etc. as well.

            Wagyu is more generic cattle that encompass Japanese cattle. they do export Kobe beef but only recently and only to a limited amount of countries.

    • Guest

      nigga hanwoo beef is the best
      you just gotta go to the ajusshi-ajooma joints in a small town to get the best stuff

      • Beef Stick Lover

        You’ve never even tasted hanwoo, have you?

    • Guest

      Go to Argentina if you want an insanely tasty and reasonably priced steak. Best food I ever had on a trip. I won’t even eat steak in the USA when I go home to visit anymore.

      • Beef Stick Lover

        Indeed. Value for money Argentina is one of the best eating countries in the world.

  • Mighty曹

    Wow, one of the few commerce related articles without Samsung in it.

    • bumfromkorea

      Because it involves Hyundai. :D

      • Mighty曹

        But Samsung can buy Hyundai. :p

  • chris

    agriculture is probably the most important part of a country’s economy. profit from selling vehicles would be nice and all, but imagine if the competition or the demands decrease in Canada but you’re farmers are left with very little to work with domestically. FTA have lots of pros but also a very costly cons if something were to go wrong.

  • inb4 Korean college students occupy the Blue House
    jk Koreans far more civilized than their decedents the Taiwanese

  • Paulistano

    Can’t understand these korean comments, really. Isn’t much better selling a car than meat? Isn’t what developed and developing countries do?

    And I thought the main problem with my country is that this shitty comercial balance here is very disadvantagious because we sell too much primary sources like meat, vegetables, fruits, iron and other things and we import technological products with our own resourcesthat we sold to them. Selling a car is much more expensive than selling meat. I really wish my countrycould stop selling meat worldwide, because cattle is destroying our land, our forest and our nature. It would be much pleasing for me if my country sells a high-end car than selling meat. Oh, my dream!

    Of course that there are people who will not benefit with this agreement, but we have to see a worldwide vision, and this time I think Korea won the prize here. Not saying Canada lost here, but, apparently, I wouldn’t allow.

  • juicebox

    Whats not to like about comparative advantage?

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