A free trade agreement between Canada and South Korea that does not include more open access to the Korean auto market would make it difficult for Ford Motor Co to justify making more investments in Canada, the president of Ford Canada said on Thursday.
The Canadian government is in the final phase of free-trade negotiations with South Korea and needs to secure a deal if it wants to be able to compete with the United States in Asia, Trade Minister David Emerson said late in October.
The United States struck a tentative deal with South Korea in April that would end the U.S. tariff on all small Korean cars, but that deal has yet to be approved by legislators in either country.
Bill Osborne, president and chief executive of Ford Canada, warned in a speech to the Economic Club of Toronto that if Canada were to try to emulate the U.S.-Korea deal, it could result in "serious economic harm" to Canadian automakers.
"In no way should it be a model for Canada in its talks with Korea," he said.
"Immediately eliminating Canada's 6.1 percent vehicle tariff would open our market to a potential flood of small cars from Korean companies that have no manufacturing presence in Canada."
Canada's market is more heavily skewed to compact cars than the U.S. market and manufacturers in Canada would be hit harder by a trade agreement that is effectively one way, Osborne said.
Osborne said South Korea uses nontariff barriers, such as regulations and certification, tax structure, and an anti-import bias to block imported products.
The Canadian Auto Workers union recently warned that a free trade deal with South Korea could cost Canada more than 33,000 jobs. It is lobbying opposition parties to reject such a pact in Parliament. ( Reuters )