As the world wakes up to a changed global trade landscape, South Korea, sometimes referred to as the “Land of the Morning Calm,” presents a new dawn for Canadian exporters seeking a fresh start in exploring Canada-South Korea trade opportunities.
In 2025, Canada and South Korea mark a decade of the Canada-South Korea Free Trade Agreement (CKFTA). The trade deal has made 93% of Canadian exports to South Korea duty-free, with the remainder set to follow by 2032, underscoring the robust Canada-South Korea economic partnership.
Despite a decline in overall Canadian exports to the Indo-Pacific region in 2024, exports to South Korea rose nearly 10% last year, while imports surged more than 30%. This strong performance has boosted Canada South Korea export growth by a whopping 60% since 2020. Canada now exports more to Korea than to France and Italy combined. With the completion of the Trans Mountain Expansion Project and the development of LNG export terminals on the West Coast, exports to South Korea are poised for even more dramatic growth.
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South Korea’s return to stability
South Korea’s political landscape has stabilized following the December 2024 constitutional crisis. The June 3 elections resulted in a decisive victory for President Lee Jae-myung of the Democratic Party. With control over both the executive and legislative branches, the Democratic Party is well-positioned to implement policies aimed at revitalizing Korea’s sluggish economy and boosting consumption, which may lead to enhanced Canada-South Korea business opportunities.
As a trading nation, exports accounted for almost 50% of South Korea’s gross domestic product (GDP) in 2024. This reliance on exports makes it vulnerable to geopolitical turmoil and unpredictable global trade dynamics, including ongoing U.S.-China trade tensions. Earlier this year, the U.S. imposed reciprocal tariffs on South Korean goods, although negotiations for exemptions are ongoing. Domestically, South Korea faces labour challenges from an aging, declining population while undergoing industrial transformation to counter growing competitiveness pressures.
Despite these challenges, the new administration is focused on economic growth and innovation. It has the fiscal capacity to implement stimulus measures, which could help lift GDP from the current growth forecast of less than 1% for 2025.
Canada-South Korea sectors of opportunities
Innovation and technology: South Korea is a Top 10 global leader in innovation and aims to be a trailblazer in artificial intelligence. Canadian companies can find significant Canada South Korea trade opportunities to contribute to this ecosystem.
Energy and critical minerals: Canada is a key partner in helping Korea diversify its liquefied natural gas (LNG) and crude oil imports, with all three of its main refineries now able to process Canadian crude oil grades. As a leading advanced manufacturing hub, reliant on imported critical minerals, Canada can also help Korea diversify its critical mineral supply chain.
Agriculture and food: South Korea’s demand for high-quality and organic food products aligns well with Canadian comparative advantages. As a Top 25 global consumer of seafood, South Korea presents strong seafood import demand.
Advanced manufacturing: South Korea’s advanced manufacturing sector, especially in semiconductors, electric vehicle batteries and electronics, offers opportunities for Canadian companies bringing cutting-edge technologies and solutions.
Clean technology: Canadian clean technology capabilities and financial sector know-how in carbon capture, hydrogen and offshore wind can significantly aid Korea in achieving its ambitious greenhouse gas transition goals.
While South Korea offers a wealth of opportunities, Canadian exporters need to invest time and resources to understand this competitive market landscape and build the relationships critical to success in the South Korean market. This involves:
- Localization. Employing local staff or partners fluent in Korean is key to navigating regulations and building trust with local stakeholders.
- Commitment. Demonstrating long-term dedication through repeated visits and continuous relationship-building.
- Value proposition. Clearly articulating the value of your products or services to discerning South Korean consumers.
- Patience and speed. Balancing the time needed to build relationships with the ability to act quickly once decisions are made. Moving at “Korean speed” is essential for success.
The bottom line: Canada-South Korea trade opportunities
Canadian exporters benefit from preferential access to South Korea, the world’s 12th-largest economy, creating numerous Canada South Korea trade opportunities. In today’s uncertain global trade environment, diversifying export strategies and finding reliable partners makes good business sense for all countries.
Renewed political stability, a focus on economic growth and strong bilateral ties with Canada make South Korea not just a tech powerhouse, but an important gateway to Asia for various sectors. But Canadian companies eager to gain access to the South Korean market must do their homework. Understanding market dynamics, leveraging Canadian strengths and building long-term relationships will help ensure success in this vibrant economy and maximize Canada-South Korea business opportunities.
This week, a very special thanks to Joy Rankothge, chief representative, East Asia and Oceania, and Susanna Campagna, principal country risk analyst, Asia.
As always, at EDC Economics, we value your feedback. If you have ideas for topics that you’d like us to explore, please email us at economics@edc.ca and we’ll do our best to cover them.
