Seoul urged to sign additional FTAs to keep trade growing
Yonhap News, Korea
Seoul urged to sign additional FTAs to keep trade growing
24 May 2011
SEOUL (Yonhap) — South Korea needs to sign additional free trade agreements (FTAs) quickly with as many countries as possible to keep its trade growing, a report said Tuesday.
The call comes as the trade volume of South Korea, Asia’s fourth-largest economy, is expected to surpass US$1 trillion this year, becoming the world’s ninth nation to reach the milestone.
"To create a new engine of growth in the post-$1 trillion trade era and become a global FTA hub, the country must actively seek FTAs with newly emerging markets especially in Africa and South America," said the report by the Institute for International Trade (IIT), a think tank run by the Korea International Trade Association (KITA).
The report identified 15 countries, including Egypt, Morocco, Nigeria and Venezuela, as the most prominent and important trade partners that South Korea must seek to sign free trade deals with at an early date.
Others are the Dominican Republic, Ecuador, Panama, Tunisia, Angola, Kenya, Ukraine, Croatia, Taiwan, Sri Lanka and Pakistan.
South Korea signed its first-ever FTA with Chile, which was enacted early 2004, and has since signed and enacted four other bilateral and multilateral FTAs with 15 countries.
Still, the amount of the country’s trade prompted by FTAs accounted for only 14.8 percent of its entire trade in 2009, far below the global average of 49.2 percent, KITA said earlier.
The IIT report said the proportion of the country’s FTA-prompted exports and imports in its trade will rise to 38.1 percent once its trade deals with the European Union and the United States are implemented. It will again rise up to 80 percent once the country signs and implements FTAs with all 15 countries named in the report, it said.
"The countries’ economic size and the size of their trade with our country may currently be insignificant, but their people will likely form the so-called ’next billion’ of young and active consumers," the report said of the importance of the countries.
The Korea-EU FTA is set to be implemented from July 1, following its recent ratification by the South Korean parliament. The Korea-U.S. FTA, however, still needs to be ratified by both South Korean and U.S. legislatures.
