TORONTO, March 10, 2014 /CNW/ - Free trade with South Korea is an unneeded challenge for Canada's auto sector just as it is getting back on solid footing, Canada's largest union in the private sector says.
"We cannot stand by a deal that allows Korean car makers to flood Canada, while doing little or nothing to get our cars into Korea," Unifor National President Jerry Dias said before details of the deal were released.
"If Korean companies want to sell more in Canada, they should be required to make those cars here."
Prime Minister Stephen Harper has flown to South Korea to release details of a trade deal with that country that will have profound impact on Canada's manufacturing sector.
Unifor and key industry stakeholders have made several suggestions that would ensure expanded trade with Korea is fair and mutually beneficial, including:
- Tying reductions in tariffs to measureable targets in reducing trade imbalances in key industries, such as auto.
- Requiring Korean firms to invest and create jobs here as a condition of tariff-free access.
- Ensuring government keeps the necessary powers to intervene directly to remedy trade imbalances.
Dias pointed to the United States, where a free trade deal with South Korea has only worsened the trade imbalance, as an indication of what Canada might expect.
"Two years after the U.S. signed a similar deal, none of the benefits and all of the downsides came true," Dias said. "The situation has only gotten worse for Americans."
Canada sold $3.7 billion worth of goods to Korea in 2012, but imported $6.4 billion. The result was a trade deficit of almost $3 billion, and the numbers for 2013 look even worse. Based on preliminary data, the deficit swelled to almost $4 billion last year as exports fell and imports grew - thanks in large part to a powerful alliance between government and corporations in Korea to boost its manufacturing sector.
"That alliance, with its subsidies and preferential policies, has been good for Korea," Dias said, adding that research from Unifor shows 33,000 manufacturing jobs could be lost in a trade deal with Korea.
Much of our exports to South Korea are raw materials such as coal, copper, aluminum and wood pulp. They send us back cars, phones and electronics. Lots of cars, phones and electronics- almost 100,000 cars, for example, compared with fewer than 100 Canadian-made cars going to Korea.
"The survival of our middle class depends on stable jobs, not exporting our riches to be manufactured in another country," Dias said.
To see Unifor's Briefing Kit and Fact Sheet on trade with South Korea, go to: http://www.unifor.org/en/search/content/korea.
Unifor is Canada's largest union in the private sector, representing more than 300,000 workers, including more than 39,000 in the auto industry. Unifor was founded Labour Day weekend 2013 when the Canadian Autoworkers and the Communications, Energy and Paperworkers union merged.