Canadian Prime Minister Stephen Harper left on Sunday for South Korea, with the hopes of finally forging a free trade deal with the latter during his visit.
The two countries have been working towards a free trade arrangement since 2005, but this was delayed in 2008 when a mad cow disease scare prompted Korea to ban Canadian meat imports. The ban has since been lifted in 2012. Re-negotiations for the FTA resumed last fall.
"This is an important step forward not just for our economy but also for our relations with a country that has long been a friend and ally," Mr Harper said in a statement on his Web site.
In February, business executives from Canada wrote to Mr Harper urging for the immediate finalisation and completion of the deal.
"In the first year since the Korea-US FTA (free trade deal) took effect in 2012, Canada's exports to Korea dropped by 30 per cent (more than $1.5 billion), and the downward trend is continuing as our competitors enjoy preferential terms of trade that Canada doesn't," their letter stated. "Only the conclusion of an FTA with South Korea will protect and create jobs by restoring a level playing field for Canadian companies and workers."
Ed Fast, International Trade minister, admitted the decelerating figures. "Our exports to Korea have declined quite precipitously since the Americans and the Europeans got their trade agreements with Korea," Mr Fast told CTV's question period.
According to Canada's Trade Ministry, exports to South Korea reached C$3.7 billion ($3.34 billion) in 2012, while imports from the said country hit C$6.4 billion.
"It's a very long time coming," Yuen Pau Woo, president of the Asia Pacific Foundation of Canada, said. "We are well behind our competitors, and closing with Korea will show that Canada is serious about developing stronger trade ties with Asia, and could well accelerate the pace of our negotiations with other countries."
But while Canadian beef and pork shippers welcome an FTA with South Korea, the same could not be said with the country's automotive sector. Some Canada-based auto firms alleged an FTA with South Korea will slash the prevailing 6.1 per cent tariff on imports of vehicles manufactured by Kia Motors Corp and Hyundai Corp.