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A Boon to Alberta's Natural Gas Sector: Canada & South Korea Reach Historic Free Trade Agreement

On March 11, 2014, in Seoul, South Korea, Prime Minister Stephen Harper and President Park Geun-hye of South Korea announced that the two countries had concluded negotiations on the Canada-South Korea Free Trade Agreement (CKFTA).

Background & Significance

The CKFTA is Canada's first free trade agreement in Asia and will serve as a gateway into the Asia-Pacific region for Canadian businesses and workers.1 South Korea has an expanding network of free trade agreements and many South Korean companies have strong business relationships in the region.2 The CKFTA will give Canadian companies a strategic base in South Korea from which they can pursue investment and trade opportunities in neighboring countries. For example, deeper commercial interaction between the two countries will put Canadian companies in a better position to team-up with South Korean chaebols (South Korean conglomerates) and other companies in South Korea to pursue opportunities in the region. Furthermore, Canadian companies will be able to more effectively participate in global supply chains, which is an international policy priority for Canada.3

South Korea is currently Canada's seventh largest trade partner and a key market for Canadian natural resource commodities. It is estimated that the CKFTA will result in a 32% increase in Canadian exports to South Korea and boosting Canada's economy by $1.7 billion.4 This will be achieved through a broad array of measures covering practically all aspects of Canada-South Korea trade. A comprehensive overview on the specifics of these measures is addressed in a previous McMillan bulletin titled: " The Long and Winding Road – Canada-Korea Free Trade Agreement Signed".

This bulletin focuses on the prospects that the CKFTA may hold for Alberta's natural gas industry.

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