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The Place of South Korea in Canada’s Indo-Pacific Strategy – Battery Manufacturers in South Korea Will Find Critical Minerals and Clean Power in Canada

The Canadian government recently released its Indo-Pacific Strategy (the “Strategy”). Today, we begin a series of four bulletins about specific countries, or groups of countries, that the Strategy emphasizes: (i) South Korea, (ii) Japan, (iii) the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam), and, finally, (iv) India. 

The purpose of this first bulletin is to discuss the importance of South Korea in the eyes of the Canadian government and in light of the Strategy. In addition, we will briefly discuss provincial initiatives on this topic in three Canadian provinces: Quebec, British Columbia, and Ontario.

Canada’s Strategic Objectives and Initiatives in the Indo-Pacific Region

Canada has five strategic objectives in the Indo-Pacific region: (i) promoting peace, resilience, and security; (ii) expanding trade, investment, and supply chain resilience; (iii) investing in connecting people; (iv) building a sustainable and green future; and (v) cementing Canada as an active and engaged partner in the Indo-Pacific region. 

Expanding Trade, Investment, and Supply Chain Resilience

Among the initiatives set out in the Strategy, there are two that accord with South Korea’s industrial and technological strengths: (i) the intention of Canada to position itself as a reliable supplier of critical minerals and (ii) the desire of Canada to strengthen its science, technology, and innovation partnerships with South Korea in order to support international co-innovation projects and commercialization partnerships. 

The Global Importance of the Indo-Pacific Region in General and South Korea in Particular

The Strategy recognizes that the Indo-Pacific region – composed of forty economies, over four billion people, and $47 trillion in economic activity – is the world’s fastest-growing region. It too recognizes that South Korea – a country with fifty-one million people, with a gross domestic product of $2 trillion, and that is Canada’s seventh-largest merchandise export market – is an increasingly important source of foreign direct investment in Canada. 

Strategic Challenges

The Strategy recognizes that there are rising interstate tensions in the Indo-Pacific region. Of note, one of these tensions is the instability in the Korean peninsula resulting from the provocations of North Korea, a nuclear state whose denuclearization is a key Canadian foreign policy objective.

How Canada Is Engaging in the North Pacific and With South Korea

The Strategy states that Canada is a Pacific country, given its 25,000 kilometres of Pacific coastline. It too stresses that the North Pacific is a region in which Canada has a long-standing and deepening relationship, especially with respect to trade with South Korea, which is facilitated by the Canada-Korea Free Trade Agreement that came into force in 2015. Among the opportunities for collaboration between Canada and South Korea, the Strategy cites artificial intelligence, critical minerals, and electric vehicle battery supply chains as examples. More specifically, the strategy offers five initiatives for improving Canada’s ties with South Korea:

  1. Advancing the Comprehensive Strategic Partnership, which was agreed to with South Korea in September 2022; [1]
  2. Launching a high-level Dialogue on Economic Security as a part of the Comprehensive Strategic Partnership with South Korea;
  3. Working together with South Korea in support of resilient supply chains, the supply of critical minerals, improved labour conditions, and environmental protections, including the transition to clean energy;
  4. Supporting South Korea’s efforts to achieve a denuclearized, peaceful, and prosperous Korean peninsula; and
  5. Establishing a new annual Canada–South Korea climate change dialogue.

Provincial Initiatives 

The Québec Strategy

The province of Québec has created a separate provincial strategy for the Indo-Pacific region. The Quebec strategy, titled a “Pathway to Economic Growth: New Ambitions for Quebec”, (PDF, 3.4MB) recognizes that the Indo-Pacific region has become the new global economic centre of gravity and that South Korea is one of the world’s leading investors. Québec has maintained a presence in South Korea since 1991 and seeks to attract more foreign direct investment in the province, particularly in key sectors such as critical and strategic minerals as well as electric vehicle batteries.

British Columbia’s Trade Initiatives

South Korea stands as British Columbia’s fourth-largest export market. It therefore has been acknowledged by the Premier of British Columbia as a “strong historical trading partner”, and economic relations between British Columbia and South Korea hold significant importance. British Columbia is at the forefront of a trade diversification strategy towards Asia, aimed at growing provincial businesses, generating quality employment opportunities for its residents, and enhancing the reliability of supply chains for goods and services. The province is committed to reinforcing its reputation as a reliable partner on the cutting edge of clean energy, clean technology, biotech, agritech, education, and responsible resource development. In this context, substantial efforts have been directed towards engagement in South Korea. British Columbia maintains a leading position in leveraging the federal Strategy to deliver stability, jobs, and opportunities for all British Columbians in a time of global uncertainty and rising costs.

Ontario’s Trade Initiatives

For Ontario, South Korea is the fourth-largest export market in Asia and has been acknowledged by the Minister of Economic Development, Job Creation, and Trade as a “trusted partner and friend”. The Ontario government recently concluded a successful trade mission to South Korea aimed at fortifying economic partnerships and forging new alliances. The mission focused on showcasing the province as the innovation and manufacturing gateway to North America, with the aim of attracting new investments in crucial sectors. Of particular focus was the promotion of Ontario’s strengths in automotive, aerospace, and other key emerging sectors.

In the second and next bulletin of this series, we will focus on Japan, a long-standing commercial partner of Canada.

Source : Fasken