Four things unions want you to know about the Canada-South Korea free trade agreement

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Photo: flickr/spenceyc

The recently announced free trade deal between Canada and South Korea has raised the ire of several unions, who warn that it could have a detrimental effect on Canadian workers. Here are four things unions are worried about now that trade is about to open up between the two countries.

1. It supports trade imbalances

Both Unifor and the United Steelworkers have raised concerns that the deal will deepen an already high trade deficit between Canada and South Korea. Last year, Canada exported $3.7 billion worth of goods to Korea in 2012 and imported $6.4 billion, according to a fact sheet provided by Unifor. USW believes that this imbalance is particularly pronounced in the steel industry with steel imports from South Korea far outnumbering imports.

2. Refined goods in, raw goods out

Another concern is that while South Korea does import a great deal of raw materials -- coal, copper, aluminum and wood pulp mostly -- what they export are the kind of goods that should be Canadian-made, namely cheaply produced electronics and cars. This is a big problem for unions. Unifor president Jerry Dias told Canadian Manufacturing that these items should be produced in Canada to create more jobs.

3. The Korean auto-market is a serious threat

A key component of the deal is that over three years it will phase out tariffs on South Korean-made cars, and immediately end tariffs on Canadian car imports. Despite this, Dias has condemned the deal for creating a one-way flow of cars into Canada. He has an ally in Ford Motor Company of Canada -- their CEO Dianne Craig told CBC News that the deal will do nothing to open South Korea's markets.

4. There's a dispute mechanism that could have big impacts

According to a press release from USW, the deal is also expected to have an investor-state dispute settlement process build into it. This process, which allows foreign investors to take action against foreign governments in sometimes private arbitral tribunals, has often been criticized for lack of transparency.


Photo: flickr/spenceyc


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