South Korea Protests Canada's Steel Quota Cuts: A Trade Tensions Update
In a recent development, South Korea has taken a strong stance against Canada's decision to tighten tariff-rate quota (TRQ) measures on steel imports, urging Ottawa to reconsider its policy. The Trade Ministry announced that Vice Trade Minister Park Jung-sung expressed Seoul's formal protest during a meeting with Canadian officials, highlighting the potential impact on bilateral trade relations.
The revised Canadian rules propose a reduction in import quotas for steel products from free trade agreement partners, including South Korea, from 100% to 75% for specific steel derivatives. Additionally, Canada plans to impose a 25% tariff on items like prefabricated buildings, wire, and fasteners. Park deemed these measures unacceptable and demanded their withdrawal.
He argued that Canada's decision contradicts international trade law and the principles of the World Trade Organization (WTO) and the Ottawa Group. Park emphasized the potential harm to Korean companies already operating or planning investments in Canada, urging the issue to be addressed without compromising broader strategic cooperation.
South Korea and Canada share significant partnership potential in defense, including a submarine procurement program, as well as in AI, automobiles, batteries, critical minerals, and energy. Park expressed Korea's hope to strengthen a reliable, mutually beneficial industrial supply chain with Canada, a country that has long advocated for a rules-based trading order.
Canada's tougher quotas are justified as a means to protect its domestic steel industry amidst rising global trade tensions. The United States currently imposes a 50% tariff on steel imports, while the European Union is considering similar TRQ safeguards. With both Washington and Ottawa tightening trade barriers, Korean steelmakers anticipate increased pressure.
Last year, Korea exported approximately 620,000 metric tons of steel products valued at $780 million to Canada, making it the 14th-largest steel export market for South Korea, according to the Korea International Trade Association. The situation underscores the delicate balance of international trade and the potential consequences of policy decisions on global supply chains.
