[Excerpt: The free-trade agreement between South Korea and Chile has proven to be a win-win deal for both countries, with two-way trade jumping more than 50%, the government said on Thursday. Bilateral trade stood at US$2.64 billion between April 2004 and March 20 this year, up 50.6% from the same period a year earlier, said the Ministry of Commerce, Industry and Energy. The growth rate was much higher than an average 19.1% rise in Korea's trade with other countries.]
http://208.39.143.167/atimes/Korea/GD02Dg01.html Apr 2, 2005 Korea hungry for FTAs SEOUL - South Korea is aiming to have at least 15 free-trade agreements (FTAs) by the end of 2007 to help expand the country's share of the global market and fuel growth, government officials said on Wednesday. Earlier in the day, the trade policymaking body within the Ministry of Foreign Affairs and Trade revealed the plan in an annual policy report to President Roh Moo-hyun. An FTA between South Korea and Chile - Seoul's first - went into effect in April 2004, while a pact with Singapore was signed in November, with the finishing touches still being added prior to ratification. "No specifics can be given on the countries that South Korea will have an FTA with at the end of 2007," said Kim Sung-hwan, the chief of the Office of Policy Planning and International Organizations. The official also declined to say whether an FTA with Japan could be signed by then. The Dokdo hitch Japan and South Korea had planned to sign a free-trade deal by the end of 2005, but negotiations hit a snag over the scope of agriculture liberalization being proposed by Tokyo. Japan had hinted that it might open about 50% of its market to South Korean agricultural goods, while South Korea said the low market access would defeat the purpose of an FTA. A recent dispute involving Japan's claim to sovereignty over South Korea's Dokdo islet in the Sea of Japan (East Sea) is further hindering progress. Seoul and Tokyo first discussed the feasibility of an FTA in 1998, with talks gaining momentum after the summit meeting between President Roh and Japanese Prime Minister Junichiro Koizumi in late 2003. Negotiators from the two countries held six rounds of talks in 2004 and planned to offer detailed concession plans this year so that the year-end deadline for a final deal could be met. However, officials close to the bilateral discussions now say Tokyo's claims of sovereignty over Dokdo could stall all attempts to liberalize trade relations. Dokdo, under South Korean control since the liberation of the Korean Peninsula from Japanese colonial rule in 1945, lies between the two nations but is much closer to South Korea. Japan has periodically renewed its claim to the islet, also called Takeshima in Japan. The latest trigger came when Japan's Shimane prefecture adopted an ordinance on March 16 to boost Tokyo's claim to the islets, further infuriating South Koreans. Japan is a key trading partner of South Korea, with bilateral trade reaching US$67.8 billion last year. Foreign direct investment from the neighboring country topped $2.24 billion in 2004, a 310% gain from the previous year, making Japan one of the leading investors in South Korea along with the United States. Policymakers from Korea's Ministry of Finance and Economy and the Ministry of Agriculture and Forestry, which seek an FTA with Japan as a means of securing access to the $50 billion Japanese agricultural market, say in private that things are not going as planned. They have started to call for a pragmatic approach and a separation of politics from economic issues. On the Japanese side, a report by the Institute of Developing Economies shows that a scrapping of the proposed FTA with South Korea could result in the country's gross domestic product losing 10.44% growth over a decade, translating into a loss of $443 billion. The Japanese institute also says a decline in local interest in South Korean cultural products, like television dramas and songs, could add up to $1.9 billion in earning losses for the Japanese economy. Anti-Japanese sentiment, it says, could also hinder South Korean acceptance of Japanese cultural products, resulting in another $17.7 billion in lost gains over an extended period. More the merrier Seoul's FTA moves are in accordance with Roh's emphasis last year that South Korea must make a determined effort to sign FTAs to expand its markets and facilitate the growth of its economy. South Korea relies heavily on exports for economic growth. It is now engaged in formal talks with 16 countries or bodies, including Japan, Canada, the Association of Southeast Asian Nations (ASEAN) and the four-nation European Free Trade Association (EFTA). Progress has been reported in the talks with the EFTA nations of Switzerland, Norway, Iceland and Liechtenstein, as well as with Canada and the 10-member ASEAN group. According to officials, talks with ASEAN are going as planned, with a deal likely to be reached by the end of this year. Talks on non-manufacturing trade could take a little longer since opening the market to cheap agricultural products may be opposed by local farmers who were hit hard by the FTA with Chile. Seoul says it wants to conduct FTA talks with another 10-30 countries and will conduct joint research with five countries to study the feasibility of such an agreement. The Ministry of Foreign Affairs and Trade says studies are under way with India, Mexico, Russia and the South American MERCOSUR market, made up of Brazil, Argentina, Uruguay and Paraguay. Exploratory talks are also on with the US and China. In 2005 alone, South Korea hopes to conclude free-trade pacts with Singapore and the EFTA. A detailed legal review of a final draft on an FTA with Singapore will be concluded as quickly as possible, with both sides expected to sign a temporary agreement in April, senior trade negotiators announced recently. The agreement would then be sent to the National Assembly for ratification. The Ministry of Foreign Affairs and Trade and other experts anticipate rapid progress on talks with the EFTA since the economic and industrial structures of the two sides are compatible, with few controversial issues between them. South Korea and Canada held their second preliminary talks on a free-trade deal this week to study its feasibility further. The meeting on Thursday and Friday in Ottawa was scheduled to address issues raised at the first talks in Seoul in late January. The preliminary talks are a follow-up to an agreement that the leaders of the two countries reached at the summit of the Asia-Pacific Economic Cooperation (APEC) forum in November 2004. Government officials say topics at the meeting would include the scope of free trade and "issues of particular interest". Seoul is pushing for an early start to formal talks that will lead to a free-trade pact, according to the officials. South Korea's prowess in manufacturing, coupled with Canada's abundant resources and expertise in certain high-tech areas make the two economies complementary. An FTA is expected to enhance bilateral investment and give South Korea a stable foothold in the North American Free Trade Agreement (NAFTA) market, which accounts for 36% of the world's gross domestic product. Sweet Chile The free-trade agreement between South Korea and Chile has proven to be a win-win deal for both countries, with two-way trade jumping more than 50%, the government said on Thursday. Bilateral trade stood at US$2.64 billion between April 2004 and March 20 this year, up 50.6% from the same period a year earlier, said the Ministry of Commerce, Industry and Energy. The growth rate was much higher than an average 19.1% rise in Korea's trade with other countries. "The accord played a key role in opening new horizons for South Korea-Chile economic exchange," said Kim Pil-goo, director of the ministry's export-import division. "The trade pact can be viewed as a success since the two economies complement each other," he said. South Korea exported $778.6 million worth of goods during the period, while importing $1.86 billion of raw materials and farm produce. According to the ministry, South Korea has been able to raise its market access by four to 10 percentage points on products where Chilean tariffs have been scrapped completely, such as automobiles, mobile phones, TVs, cars, camcorders and petrochemical products. Lower tariffs have made it easier to import raw materials, such as copper ores and agricultural produce. Copper ore and related materials accounted for 72.8% of South Korean imports from the South American country, with imports of copper-related materials surging 50.4%. Imports of agricultural products rose 34.1% due largely to a surge in imports of pork, wine and farm products, causing a trade deficit of $1.02 billion. In particular, Chilean wine imports surged 150% to $8.81 million. President Roh and his Chilean counterpart have exchanged letters to commemorate the first anniversary of their free-trade agreement. In the letter to Chilean President Ricardo Lagos, Roh expressed satisfaction with the two countries becoming key economic and trade partners through the FTA, the Foreign Ministry said on Thursday. Roh also noted that the trade deal triggered an increase in bilateral trade and bore other successful results, while proposing to keep working together for mutual prosperity. In his letter, Lagos expressed satisfaction with the deal, saying Chile's bilateral trade volume rose phenomenally because of it. (Asia Pulse/Yonhap) ------------------------ Yahoo! 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