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Canada and South Korea have taken new steps to strengthen trade ties that are expected to boost several industrial sectors in Canada, including automotive and critical minerals.
This comes amid the global trade war and U.S. tariffs, which have impacted Canada’s economic growth and job market, forcing the federal government to seek alternative trading partners and work to remove interprovincial trade barriers to reduce reliance on the U.S.
On Wednesday, Canada’s Industry Minister Melanie Joly met in Ottawa with counterparts from the Republic of Korea and signed a memorandum of understanding (MOU) between the two nations.
Details of the agreement were outlined in a press release, which includes establishing the Canada-Korea Industrial Cooperation Committee to work together on what it calls “future mobility.”
Areas the committee will focus on, according to the release, include creating a footprint for Korean automotive production in Canada, with electric vehicle manufacturing opportunities among the investments, although no specific amounts were mentioned.
Artificial intelligence was also one of the “strategic sectors” mentioned as part of the agreement, but no other details were provided.
In addition to the auto manufacturing sector, the release says the agreement means further co-operation with South Korea on Canada’s battery supply chain. This means battery production, materials processing and refinement, as well as critical minerals processing and recycling.
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Canada may also be increasing some exports to South Korea as part of this agreement, according to Tim Hodgson, Canada’s minister of energy and natural resources, who was quoted in the release saying the MOU means “we are diversifying our exports,” but no other specifics were provided.
“This memorandum of understanding reflects Canada’s strategic approach to building a secure, competitive and sustainable energy future,” said Hodgson in the release.
“Canada and the Republic of Korea are trusted partners, and by deepening cooperation on critical minerals, clean energy technologies and energy security, we are diversifying our exports and strengthening resilience on both sides of the Pacific.”
Critical minerals are one of the key economic projects of national interest outlined under Ottawa’s Budget 2025, with Canada’s vastness in minerals like nickel, cobalt, graphite and lithium, which are needed for battery production, energy storage, wind turbines and many other applications as part of the transition to green energy.
According to the International Energy Agency, the global transition away from fossil fuels means demand for critical minerals could increase up to sixfold by 2040.
The release says by working with South Korean partners, Canada “will strengthen the automotive supply chain and enhance cooperation on critical mineral supply chains, clean energy transition and energy security.”
It adds that through this collaboration, Canada “will create opportunities and well-paying jobs for Canadians,” although no further details were provided on the number or types of jobs that could be created.
“Canada is an auto nation and home to world-class workers, cutting edge innovation and some of the best vehicles manufactured anywhere in the world. This new memorandum of understanding with Korea strengthens that legacy and positions Canada to lead in the next generation of automotive excellence,” said Joly in the release.
“By deepening cooperation in EV and hydrogen mobility, expanding battery and critical mineral partnerships, and attracting high-value investment into Canadian communities, this agreement will grow our auto sector, create good jobs and reinforce Canada’s position as a global leader in future-ready vehicle manufacturing.”
No specifics on companies involved were provided, but some of the largest global automotive brands based in South Korea include Hyundai Motor Group, which is also behind the Kia and Genesis brands.
— With a file from Global News’ Bryan Mullan.
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