How Canada’s trade deal with Seoul takes a cue from Gretzky’s playbook

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There was, back in the closed-off rooms where the leaders of Canada and South Korea spoke in Seoul Tuesday, a surprise guest: Wayne Gretzky.

He wasn't there in person, but in spirit, called on first by the South Korean president, Park Geun-hye. She suggested that "you miss 100 per cent of the shots you don't take." Mr. Harper, the hockey historian, was not to be outdone, dropping his own reference to skating where the puck is headed, another famous Gretzky-ism.

Mr. Harper came to Seoul in the name of pursuing more trade with Korea. That aim is written all over the books – there are two, 330 pages in total – that contain details of the "Canada-Korea Free Trade Agreement." It's an agreement that is, the books say, "Creating Jobs and Opportunities for Canadians."

But as the Gretzky talk hinted, this was about building a relationship, not discussing how many new Incheon-bound containers Vancouver dock workers are going to be loading in coming years.

Indeed, the trade deal is in many ways less about two-way trade than the globe-spanning ambitions of two countries who each stand cheek-by-jowl with economic leviathans, and who are each looking for new ways to exercise influence – and make money – independent of them.

In Seoul on Tuesday, Ms. Park's public remarks were remarkable for how little time she spent speaking about actual free trade. Instead, she mentioned how Korea wants to work more with Canada on global issues like science and technology and Arctic development. She said Mr. Harper had agreed to more "cooperation in the realm of energy and natural resources." And, critically, "we stated that we would continue to work together to meet regional and global challenges, not to mention those on the Korean peninsula."

Here, at a meeting ostensibly about free trade, she said the two had agreed that North Korean nukes "pose a serious threat to peace and stability." That, and "the prime minister and I also had productive discussions on the political landscape in north-east Asia, and on major international issues."

South Korea is a vibrant and still-ascendant economy unencumbered by China's heavy-handed strictures and more open than insular Japan. It is using those advantages to position itself as a central player – in part by virtue of geography – in north-east Asia. Part of that includes marshalling a group of global allies that can support its seat among leading nations. Canada is clearly part of that, as are the others Seoul has in recent years signed free-trade agreements with: Australia, the U.S. and the European Union. It's no secret that Korea also wants in to the broad Trans-Pacific Partnership trade deal, and making friends with countries like Canada – already on the inside at TPP – makes for good strategy.

Embedded in that bid for political influence, of course, is a push for economic dominance writ far larger than Canada's 35-million consumers.

Signing a web of trade deals is "part of their globalization strategy, in trying to help the conglomerates in Korea expand their international reach and expansion," said Raymond Yeung, senior economist for ANZ, Australia and New Zealand's third-largest bank. "The government plays a very active role in trade promotion. And signing FTAs is one way for them to get access to the markets."

Then there's Canada, which sees a free-trade deal with Korea partly as a ticket to Beijing that merely overnights in Seoul. Mr. Harper himself made that quite clear. The free trade deal "gives Canadian businesses access to a booming G20 economy, but more than that – and I can't emphasize that enough – the key supply chains that begin in Korea fan out all across Asia," he said. "That makes Korea a critical gateway into the rest of the markets in this region, and Canadian businesses now have privileged access to that."

That's not to say Korea itself might not help out the Canadian economy by buying more maple syrup and whisky. The free-trade deal may even land some more Alberta steak on Korean grocery shelves. But beef is a striking example of the uncertain effects of free-trading. Canada spent years shut out of Korea after mad cow scares. During that time, Australian cattlemen pounced, and gave Koreans a taste for the grass-fed beef grown Down Under. It's not at all clear Koreans will march back to Canada's grain-finished product, even without beef duties. At any rate, even if it returns to its past strength, the Canadian beef industry will post barely $60-million in sales to South Korea. The real trade relationship is about just one product: coal, which by itself makes up one-third of Canadian exports to South Korea, at about $1.4-billion a year. And the free-trade deal isn't going change much about that.

What it might do, though, is help ease some of Canada's mounting worries about the U.S., which has proven a less-reliable trading partner of late, be it because of softwood issues or oil and gas. Last year on Oct. 2, TransCanada Corp. admitted it was unlikely to get a U.S. presidential permit for the Keystone XL pipeline in calendar year 2013. Four days later, Mr. Harper arrived at the APEC meeting in Bali, where a conversation with Ms. Park set the wheels in motion for the free-trade agreement concluded Tuesday.

Mr. Harper saw the puck landing in Asia, and Korea as a way of skating there.

As he put it in Seoul: "Much of the world's economic growth over the next generation will be in Asia. With this deal today, we have opened the door to opportunities that will boost Canadian prosperity now and for decades to come."