What is the Canada-Korea Free Trade Agreement?

The Canada-Korea Free Trade Agreement (CKFTA) is the bilateral free trade agreement between Canada and the Republic of Korea, signed on September 22, 2014 in Ottawa and in force since January 1, 2015. CKFTA was Canada's first free trade agreement with an Asian country. It eliminated tariffs on about 88 per cent of bilateral trade by 2025 and is scheduled to eliminate most remaining duties over a 12-year phase-in. Two-way trade has grown by roughly 20 per cent since the agreement took effect.

South Korea is Canada's seventh-largest export market, taking about $7 billion of Canadian goods annually. Major Canadian exports include coal and coke, beef and pork, aluminum, copper, wheat, canola, and aerospace products. South Korean exports to Canada include passenger vehicles (Hyundai-Kia produces in Korea but ships to Canada through global supply chains), automotive parts, electronics, machinery, and consumer goods. Two-way trade in services, including engineering, finance, and tourism, has grown alongside merchandise trade.

CKFTA was negotiated over nine years and represented a key Canadian diversification step into Asia ahead of the broader CPTPP trade framework. The agreement covers goods, services, investment, government procurement, intellectual property, environment, and labour. It includes an investor-state dispute settlement chapter, a joint commission for ongoing administration, and bilateral cooperation on trade facilitation. South Korean cars manufactured in the United States (rather than Korea) would have qualified for U.S.-Canada CUSMA preferences anyway, so much of CKFTA's auto-sector benefit is for Canadian autos exported to Korea.

CKFTA is part of Canada's broader Asian engagement. Canada is also a founding member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, which Korea is considering acceding to), the Canada-Asean Joint Trade Agreement (under negotiation), the Canada-India Comprehensive Economic Partnership Agreement (suspended since 2023 amid bilateral political tensions), and Canada-Indonesia Comprehensive Economic Partnership Agreement negotiations. The Indo-Pacific Strategy of November 2022 commits $2.3 billion to expanded Canadian engagement in the region, of which South Korea is a key partner.