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Canada and South Korea Said Getting Closer to Trade Pact

Canada and South Korea are getting closer to a free-trade agreement, with auto industry issues one of the few remaining obstacles.

Negotiators are finalizing details surrounding auto-safety standards required by the South Korean government, said a person briefed on the talks, who asked not to be identified because the negotiations are confidential. U.S.-based automakers with operations in Canada, such as General Motors Co. (GM) and Ford Motor Co. (F), are concerned such standards could be used as indirect trade barriers, the person said.

The countries are discussing how to phase out tariffs on South Korean automobiles imported into Canada manufactured by companies such as Hyundai Motor Co. and Kia Motors Corp, and how to develop a dispute-settling mechanism, according to the person.

A pact with South Korea would be the latest trade agreement signed by Prime Minister Stephen Harper, who reached a deal in principle with the European Union in October.

Canada and South Korea started negotiations on a trade deal in 2005, with talks reaching an impasse in 2008. Two-way merchandise trade between the two countries reached almost C$10.1 billion ($9.2 billion) in 2012, according to Canadian government figures.

Negotiations between the two countries are ’’ongoing,’’ Rudy Husny, a spokesman for Canadian Trade Minister Ed Fast, said in an e-mail.

The U.S. implemented a trade deal with South Korea in 2012.

“There’s been a sense for a few weeks now that the negotiations were pretty much close to being finalized,” said David Adams, president of the Global Automakers of Canada, which represents auto companies based in South Korea, Japan and Europe. “It would provide a level playing field, or at least two-thirds of a level playing field. The next step would be for Canada to get an agreement negotiated with Japan.”

To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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