Historic Agreement Signed in Ottawa
Canada and South Korea have formalized a significant step in their bilateral trade relations, signing a Memorandum of Understanding (MOU) aimed at strengthening cooperation, particularly within the automotive and critical minerals sectors. The agreement was signed in Ottawa on Monday, January 27, 2026, by Canada's Minister of Industry, Mélanie Joly, and South Korea's Minister of Trade, Industry and Resources, Kim Jung-kwan.
This non-binding MOU is designed to deepen the existing Canada-Korea Comprehensive Strategic Partnership, which was launched in 2022, and focuses on economic prosperity and supply chain resilience. The move comes as Canada seeks to diversify its trade partners and reduce reliance on other nations amidst global trade dynamics.
Key Areas of Collaboration
The newly signed memorandum outlines several key areas for enhanced industrial collaboration, primarily centered on 'future mobility' and resource security. These include:
- Automotive Industry: Efforts to attract Korean automobile manufacturing and investment to Canada, expanding the presence of the Korean automotive industry, and exploring opportunities for electric vehicle (EV) manufacturing.
- Battery Supply Chain: Expanding battery manufacturing capabilities and fostering cooperation across the entire battery supply chain, encompassing manufacturing, critical mineral mining and refining, and research and development.
- Critical Minerals: Strengthening critical mineral supply chains, including processing and recycling, to support the clean energy transition and enhance energy security. Canada possesses significant reserves of minerals such as nickel, cobalt, graphite, and lithium, which are vital for battery production and green energy technologies.
- Hydrogen Economy: Cooperation on hydrogen commercial vehicles and the establishment of stable hydrogen supply chains, with proposals from entities like Hyundai Motor Group to build a hydrogen ecosystem in Canada.
The agreement also references potential cooperation in other strategic sectors, including artificial intelligence (AI), steel, cement, nuclear energy, and liquefied natural gas. To facilitate these initiatives, a Canada-Korea Industrial Cooperation Committee will be established.
Economic Context and Future Outlook
The signing of this MOU is set against a backdrop of robust trade relations between the two nations. In 2024, bilateral merchandise trade reached $24.5 billion, positioning South Korea as Canada's seventh-largest trading partner. Canada's automotive industry is a significant economic contributor, accounting for $16.8 billion of the GDP in 2024 and supporting over 550,000 jobs. South Korean companies have already demonstrated their commitment to Canada's battery ecosystem, investing billions of dollars since 2020.
This trade initiative is also seen in conjunction with South Korea's bid for Canada's Patrol Submarine Project, where industrial investment pledges are a key consideration in the procurement process. The collaboration underscores a mutual commitment to building secure, competitive, and sustainable industrial futures for both Canada and South Korea.
5 Comments
Michelangelo
This agreement seems more about the submarine bid than true economic partnership.
Leonardo
Boosting our critical minerals sector and EV manufacturing is vital for the future economy. However, we must ensure that increased mining operations are conducted with the highest environmental standards and benefit local communities directly.
Michelangelo
More mining means more environmental destruction, no thanks.
Donatello
It's good that Canada is seeking to reduce reliance on single nations for critical resources, which is a smart move for national security and economic stability. But the details on intellectual property sharing and long-term control of these industries remain unclear.
Michelangelo
The focus on automotive and future mobility is forward-thinking and could create many opportunities for Canadians. Yet, the article mentions South Korea's submarine bid, which makes one wonder if this economic cooperation is also tied to geopolitical leverage.