Korea seeks detour for FTA with Mexico
Korea Times
Korea Seeks Detour for FTA With Mexico
By Ryu Jin
Korea Times Correspondent
MEXICO CITY - South Korean President Roh Moo-hyun’s visit here will likely be a great challenge for the two countries, which are haggling over a free trade agreement (FTA) across the Pacific Ocean.
During the state visit by President Roh to the Central American nation from Sept. 8 to 10, South Korea hopes to speed up negotiations for an economic partnership agreement (EPA), which includes an FTA and other measures for economic cooperation.
The two countries have been in consultation on the matter since May last year when they launched a joint study team for the EPA. But, just ahead of the scheduled South Korea-Mexico summit, Mexico declared a breakdown in the negotiations, citing unfavorable public opinion at home.
In addition to unfavorable public opinion in Mexico, which believes Mexico has already signed too many'' FTAs, South Korean officials said, Mexico's request foradditional concessions’’ was one of the barriers that stalled the negotiations.
Mexico has asked South Korea to invest in the Mexican car industry as a prerequisite for the cooperation accord,'' said an official at the Ministry of Foreign Affairs and Trade in Seoul.
To break the impasse, the ministry discussed the issue with Hyundai Motor. But the carmaker remained negative, saying it has to fully commit to its newly built plant in Alabama, U.S.A.
The prerequisite was similar to what the Mexican government asked of Japan when it signed an EPA with Japan in 2004. Japan agreed in the end to build a car plant that could produce 50,000 units at that time.
{{Stalled Talks for FTA}}
South Korea saw a trade surplus of $2.5 billion (2.5 trillion won) last year with Mexico, which has a population of about 100 million and is party to the North American Free Trade Agreement (NAFTA).
But the stalled negotiations for an FTA and an expanded economic partnership are expected to deal a serious blow to South Korea's exports to American markets by weakening the competitiveness of its goods in those markets.Such products as electronics, mobile phones and vehicles, which are the nation’s key export items and compete with Japanese goods, will be crowded out of the Mexican market due to higher tariffs,’’ a South Korean trade official said.
South Korea has pushed for the FTA with Mexico in the hopes that it could use the Central American nation as a bridgehead into Latin American markets, in addition to the huge NAFTA market.
In contrast to Mexico, which has already signed FTAs with 43 countries around the world, South Korea has struck free trade pacts with only three countries _ Chile, Singapore and the four-nation European Free Trade Association.
South Korea plans to sign FTAs with 50 nations by 2007. Without successful conclusion of the FTA talks with Mexico, however, South Korea may end up being a tail-ender in FTAs despite its status as the world’s 10th largest trading country.
Seeking a Detour
With the FTA talks delayed, South Korea is now taking a different strategy by opening up some parts of the markets first, such as government supplies, under a new program dubbed a strategic economic complementary agreement (SECA).''
To reinforce the government's efforts, the minister of information and telecommunication, the minister of government administration and home affairs and the minister of science and technology, as well as the trade minister are accompanying Roh on his three-day visit.
Mexico has shown keen interest in South Korea's advanced technologies for e-government solutions at the International Innovation Exhibition (InnoEx) 2005 held in Seoul last May.
Minister of Information and Communication Chin Dae-je said early this month that the government will sign a memorandum of understanding (MOU) with Mexico during Roh's visit for the introduction of Digital Multimedia Broadcasting (DMB) services.The two nations will agree on bilateral cooperation for DMB services during the president’s visit to Mexico,’’ Chin told reporters.
