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Free trade deal will help chart future of Canada-Korea relations

Tai Jeong

By Tai Jeong

Technical Director, Canada Wood Korea

September 18, 2013

(By Len Edwards, Vancouver Sun August 15, 2013 © Copyright (c) The Vancouver Sun)

Article of this article, Len Edwards was Canadian Ambassador to Korea from 1991 to 1994 and is a former Deputy Minister of Foreign Affairs.

Author of this article, Len Edwards was Canadian Ambassador to Korea from 1991 to 1994 and is a former Deputy Minister of Foreign Affairs.

A Free Trade Agreement would be a critical sign that each country believes the other should be one of its key international partners

Over the course of this year the Korean Embassy in Ottawa and Korean consulates across Canada have held many events to celebrate the 50th anniversary of Canada-Korea diplomatic relations. The Canadian Embassy in Seoul has done the same in Korea.

This year also marks the 60th anniversary of the Armistice that ended the Korean War, in which Canadian soldiers fought and died alongside their Korean and UN allies to resist aggression and preserve the Republic of Korea as an independent and free state.

These anniversaries should remind Canadians of the close and beneficial ties our country has enjoyed with Korea, from the tough times during and following the Korean War to the happier decades of development and building that followed. They remind us that many Koreans have chosen to make Canada their home. They and their families have woven their personal stories and contributions into the fabric of our bilateral relationship.

These events also provide us with a platform for looking to the future.

But it will be a different future. The Korea of the 1960’s to 1990’s was a strikingly different country than the 21st century Korea of today, the product of the most successful development story on the planet.

The Republic of Korea is now among the globe’s elite economies. A G20 and OECD member, Korea has the 12th largest GDP in PPP terms according to IMF rankings (Canada’s is in13th position). It has 13 companies on the 2012 Fortune 500 list (Canada has 11). It is the first country to have graduated from significant aid recipient to significant aid donor. If Canada and Korea are to make a go of another 50 years of solid relations it will on the basis of a very different reality and accompanying dynamic. It will be one between developed states, two democracies enjoying high standards of living, with fully mature industrial and business sectors.

Continued success will not come easily. New effort, some new ideas, and a new level of commitment are all going to be needed.

Some traditional differences remain. Korea’s lingering attachment to a more hands-on role for the state in the Korean economy contrasts to Canada’s commitment to the open market system. Korea’s overwhelming preoccupation with its security differs from our more detached view of security threats further from our shores. Korea is a homogeneous society where pride of nation is singularly strong, while Canada’s history and diversity give us a different source for defining our sense of “nation” and what makes us proud.

But there is a new and greater challenge. Korea and Canada are now more or less equals in power terms. This requires adjustments on both sides. It has implications for how we treat and do business with each other.

While we have continued to grow and strengthen our country as one of the world’s most attractive places to live, Canada’s relative position in the world has been in decline for some time. Other nations like Korea have caught up and even surpassed us in terms of economic size and global influence. Many Canadians will be comfortable with this development. But some might be unwilling to accept this reality, or if they do, become more defensive-minded economically, and politically sensitive to Korean approaches that remind us of our lessened influence. Some might believe that we still have a special place, and resist giving Korea a seat at the same table.

In contrast, Korea has been a country on the rise. Koreans are justifiably proud of this achievement and many are ready for the responsibilities that go with enhanced power. But some Koreans might still think they are entitled to special treatment and protections they no longer need. They may still approach every negotiation as a case of winning or losing, rather than creating win-win opportunities between long-term equal partners. As they rub shoulders with the world’s biggest players, some Koreans might even think they can do without some countries that have been important to them in economic and security terms.

This may paint a stark picture, but unfortunately, these are the realities. And some of these dynamics appear at work as Korea and Canada struggle to complete the negotiations on a Free Trade Agreement that have been underway on and off since 2005. This agreement is the essential framework for the modernized trade and economic relationship that should exist between two developed and equal partners such as Korea and Canada.

There is a lot at stake here. For Canadians, the Korean market has a well-earned reputation as a tough environment, but Korean firms are dynamic players in the Asia Pacific region, where Canadian firms look to be more engaged. Korea provides not only a market for Canadian goods and services, but access to regional and global supply chains through partnerships and business tie-ups.

Canada’s high quality and healthy agri-food products can provide Korean consumers with more choice and price options through competition with other suppliers such as the USA, which has already completed a trade deal with Seoul. For Koreans, the Canadian market has been good for exports of automobiles and other manufactured products. It will be better with a further lowering of tariffs. While Korea’s primary interest in eventually gaining access to Canadian oil and gas is probably not on the FTA table, the Koreans must know that the Asian market gives Canadians many options. Interest in long-term investments or supplier arrangements are bound to be higher if the economic relationship is stabilized and facilitated by a modern and overarching trade and economic framework that creates trust and carries on-going political commitment.

The question is: are Canada and Korea ready to put each other among their most favoured relationships, on equal status with other favoured relationships? Canada has sent those signals to Seoul.

An FTA would be a critical sign that each country believes the other should be one of its key international partners in the 21st century, economically and in broader terms as well.

This is especially relevant as the potential in Canada-Korea relations moves beyond the largely bilateral sphere of the past 50 years to more cooperation on international issues of common concern, such as the health of the global economy, effective global governance in the G20 and elsewhere, and preserving a peaceful and secure Asia Pacific region.

There are many indications that Korea wants to play more actively on international issues, a further sign of its “coming of-age”, and is seeking likeminded partners, such as Canada. Canada should be ready to be that partner.

This makes sense. We both live alongside major powers and understand that international cooperation, rules and norms, and engagement in effective global governance systems makes us stronger and more influential than if we stand on our own. And we have already worked well together in our coordinated hosting of the G20 Toronto and Seoul Summits in 2010.

All this speaks promisingly of another 50 years of cooperation and mutual benefit, with our bilateral relations strengthened and amplified by new global dimensions. But first we need a successful conclusion to our FTA discussions.

Len Edwards is a Strategic Adviser at Gowling Lafleur Henderson LLP, and a Distinguished Fellow at both the Asia Pacific Foundation of Canada and the Centre for International Governance Innovation (CIGI). He was Canadian Ambassador to Korea from 1991 to 1994 and is a former Deputy Minister of Foreign Affairs.