Thank you, Madam Chair. I'd like to thank the committee for this opportunity to provide comments on the business and trade opportunities with South Korea.
My name is Sonny Cho, CEO at the Canada Korea Business Council. We work mostly with the Canadian SMEs in the technology and manufacturing sectors across Canada. Some of the activities we're involved in are hosting forums to educate and motivate Canadian SMEs to explore the South Korean market. We host technology tours to Korean SMEs to showcase Canada's leadership in advanced technologies and try to facilitate joint ventures.
We also support government missions to and from Korea to promote trade and investment. Some members of our CKBC lead their own private business missions to arrange B2B meetings and facilitate business deals.
Why Korea? Korea has about 52 million in population, $1.8 trillion U.S. in GDP, and it is one of the top 10 economies in the world. It's ranked number five in R and D expenditure. Canada is actually at number 13. Canada and Korea have had a free trade agreement since 2015.
Just recently Korea has been trying to become less dependent on China. It currently imports about 25%. It has suffered substantially in recent years with China's retaliation. It is building more plants in the U.S., India, and ASEAN countries. Now we're beginning to get a few in Canada in the semiconductor and EV sectors.
Some of the opportunity sectors for Canadian companies in South Korea are in automotive, aerospace, ICT, autonomous vehicles, artificial intelligence, cybersecurity, energy and clean technologies, defence, communications systems and radars, ocean technologies, medical devices, life sciences, and agriculture and food.
You've probably seen in the media some of the recent deals with Canada were Li-Cycle with LG Chem and LG Energy Solution; Stellantis and LG Energy Solution; GM Canada with POSCO; and Naver's investment in Wattpad in Waterloo.
One area where I think we can improve especially is in commercial branding. Koreans love Canada and Canadians, but they don't give us too much business. Most foreigners can't name what commercial products Canada makes. More Canada branding programs are needed, and we need to support some of the service providers who are involved in facilitating exports, joint ventures and foreign direct investment.
Frequency and consistency with a long-term view are critical for success. Face-to-face meetings, sharing meals, these are the universal culture. We should be doing more of that now that we're getting out of the pandemic.
Many Canadian SMEs are not very knowledgeable about South Korea and are reluctant to invest time and resources to penetrate the Korean market. Most SMEs are still very comfortable just selling to the U.S., the U.K., the western EU and Australia.
We're not taking advantage of the Korean Canadian experts who are living in Canada. Actually, the Korean government is the one taking advantage of the Korean diaspora around the world. It supports its chapters and conferences annually, trying to help export their goods over to other countries. I think Canada should get involved in taking advantage of our multicultural diaspora communities, which are very active in international trade.
We need to improve our competitiveness. Canada's contribution to Korea's imports is only 0.87%. China and Japan are the top exporters to Korea. It is understandable since they are its closest neighbours, but other western countries do much better than Canada. The U.S. is at 12%. Germany is at 4.5%. Australia is at 3.85%. The Netherlands is at 1.5%. They export from two to 15 times more than Canada to South Korea. We need to study and understand why we are behind other countries.
The trade commissioner service and the EDC do a great job in helping many Canadian companies, but I think there are limits to what the public sector can do. There's a gap to be bridged. I think the private sector can do a better job in recruiting and persuading Canadian SMEs to sell to South Korea. More Canadian SMEs need to travel to Korea and Asia to understand the markets and build relationships.
Building relationships with major Korean companies can open up a lot of opportunities and provide access to China, India and other Indo-Pacific markets. There are lots of good government programs, but directing SMEs to take advantage of these programs and be adventurous is still a challenge.
In closing, we've had good—