A trade deal signed between Canada and South Korea won't do much for the British Columbian economy because many of the products which will see trade tariffs lifted didn't have high duties to begin with, according to Unifor economist Jim Stanford.
The deal was signed this week and enjoys the support of the NDP, Liberals and Conservatives in the House of Commons.
In a breakdown of the deal's benefits for different regions of Canada, Ottawa claimed British Columbia stands to "benefit significantly" from the agreement.
The breakdown said duty-free access for forestry and value-added wood products like lumber and particle board plus access to South Korea's government procurement market are some of the benefits for the province.
On its website, the federal government further boasted a three per cent tariff on liquefied natural gas (LNG) exports will also be lifted, another big perk to the agreement for B.C.
But Stanford, an economist for Canada's largest private-sector union, said the agreement does little to ease a quantitative and qualitative trade imbalance with the Asian nation.
According to Asia Pacific Foundation information sourced from Industry Canada, the country imports twice as much from Korea as it exports.
"We export mostly raw material to Korea, and we import sophisticated high technology products from Korea," Stanford said. "Canada's top four exports to Korea last year were coal, copper, aluminum and wood pulp. Our top four imports were motor vehicles, electronic circuits, auto parts and smartphones."
Stanford said he expect the trade deficit to increase and for Canada and B.C. to remain in a trap of only exporting "staples" to countries that manufacture.
'Everyone and their dog is building LNG'
The British Columbia government is more upbeat about the deal, and claims the agreement could see the province increase its exports to South Korea by 32 per cent.
"This deal will provide clear benefits for B.C. companies doing business in South Korea, especially in the forestry, liquefied natural gas, seafood and agrifoods sectors," read a statement from the Ministry of International Trade. "South Korea is British Columbia’s fourth-largest goods export market and Canada’s third-largest trading partner in Asia."
The ministry said it has "long called" for such an agreement from Ottawa.
But again Stanford disagrees. He said since South Korea doesn't have its own LNG, it already has low tariffs on the product and doubts the agreement is going to help boost exports.
"We don't get an advantage selling natural gas to Korea from free trade," Stanford said. "Everyone and their dog is building LNG plants these days, so the global price for LNG is going to fall dramatically in the next decade."
He said those predictions put the province's highly-touted LNG plans into question.
Just this week, Malaysia's state-owned oil and gas company threatened to pull out of its $10-billion B.C. LNG investment, citing delays and potential taxes imposed by the provincial government.
The Tyee attempted to contact numerous LNG industry representatives for response to Stanford's assertions. Phone calls and emails were not returned.
The Forest Products Association of Canada said it was a staunch supporter of the deal, pointing out in recent years that the industry was heavily reliant on the United States for a customer base, but has had success diversifying its export markets. It said the deal with South Korea will further help diversification.
Stanford said the only Canadian industry he could see benefiting from the deal is pork and beef.
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