The federal NDP is declaring its support for Canada's free-trade deal with South Korea, a move that signals a shift in the party's economic position and places the NDP at odds with the union representing auto workers.

New Democratic MPs approved the decision Wednesday in a closed-doors caucus meeting, after a lengthy internal discussion that has played out since the trade deal was made public earlier this year.

NDP Leader Thomas Mulcair is gradually moving his party's position on trade issues toward a more supportive approach of free trade. The decision marks a departure for an NDP caucus that has traditionally been front and centre at anti-globalization rallies and opposed other Conservative free-trade deals with Colombia and Panama.

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Don Davies, the NDP trade critic, announced the party's stance Wednesday afternoon when the legislation to implement the trade deal was debated for the first time in the House of Commons.

"We want to reassure Canadians that we take a balanced approach to the economy," Mr. Davies told The Globe and Mail prior to his speech. "Just about every sector in the country, other than auto, has expressed positive views towards this deal: aerospace, transportation, agrifoods, forestry and wood products, energy and chemicals … On balance, this is a good deal for Canada."

Mr. Davies said support for the decision within the NDP caucus was "overwhelming," though he did not say whether support was unanimous.

The labour union Unifor – which was formed last year as a merger of the Canadian Auto Workers union and the Communications, Energy and Paperworkers Union of Canada – has strongly opposed the trade deal.

The union argues the deal is one-sided and will lead to more imports from popular South Korean automakers like Hyundai and Kia without any certainty of reciprocal trade or assurances that South Korean automakers will start manufacturing vehicles in Canada.

Unifor President Jerry Dias called the NDP's decision disappointing. He said automakers that manufacture vehicles in Canada, such as Chrysler, General Motors, Ford, Honda and Toyota, might reconsider how much of that work continues in light of the agreement.

"The free-trade deal with South Korea is a disaster," said Mr. Dias. "Auto companies will support the country that supports them. Making auto companies make commitments to put product in Canada becomes even more difficult when you have governments that don't care about other companies just dumping product in their market."

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Tensions already exist between the federal NDP and Unifor. NDP staff on Parliament Hill who have been represented by Unifor are seeking a new union as a form of protest over the fact that Unifor endorsed a mix of NDP and Liberal candidates in this year's Ontario election rather than issuing a firm endorsement of the Ontario NDP.

Mr. Davies said the NDP shares some of the concerns expressed by Unifor regarding the trade deal's impact on the auto sector and will push for policies that will encourage Korean automakers to shift some production to Canada.

Supporters of the deal argue it will open up markets for Canadian agriculture and in services such as banking, while reducing costs for Canadian consumers.

The NDP announcement comes on the heels of its support for a federal minimum wage of $15 an hour for workers in federally regulated jurisdictions such as transportation and banking. While the proposal was seen as having limited practical impact, it was welcomed by labour as a strong symbolic move that could pressure the provinces to raise their minimum wages.

Sid Ryan, president of the Ontario Federation of Labour, had strongly praised Mr. Mulcair's minimum-wage position. Mr. Ryan said Wednesday that it now appears the announcement was an effort to please core supporters ahead of taking a potentially unpopular stand on trade.

"I guess the [NDP] are trying to temper their support of free-trade agreements with some other progressive policies as well," he said. "They're trying to find that balance, but I don't think they're going to find the balance on free-trade agreements that's going to win labour over."