Speed up free trade talks
Korea Herald
Speed up free trade talks
Editorial
16 July 2005
For Korea which relies heavily on external markets, forging bilateral free trade pacts with its trading partners is not an option but a must. Today, regional economic blocs, which have emerged in parallel with the globalization trend, penalize a country that has no bilateral trade deals with them.
Keenly aware of this harsh reality, Korea has been stepping up efforts to enter into free trade agreements with its trading partners. In March, the Ministry of Foreign Affairs and Trade announced it would promote negotiations on FTAs with as many as 50 countries by 2007, with the goal of closing formal deals with at least 15 of them.
The aggressive policy, if implemented as planned, would take Korea close to its major rivals which made a head start. But worryingly, Korea’s pace is not as fast as it should be to catch up with such rivals as China, Japan and other Asian nations.
Yesterday, the ministry announced official FTA talks with Canada will begin on July 25, with negotiations expected to run for about a year.
Earlier this week, it signed an FTA with the European Free Trade Association, a four-member trade bloc consisting of Switzerland, Norway, Iceland and Liechtenstein. The deal was the third FTA that Korea has concluded following the first with Chile, which went into effect in April 2004, and the second with Singapore, which was signed late last year and is to be implemented within the next few months.
Korea and the EFTA closed the deal just 13 months after they agreed to begin a joint study in May 2004. The speedy process was possible because the economic structures of the two sides were compatible.
But Korea’s negotiations with other countries are not making such a rapid headway. For instance, talks with Japan have been bogged down over Tokyo’s refusal to open wider its agricultural market and the continuing disputes over Japan’s controversial history books and unwarranted territorial claim to Dokdo, Korea’s easternmost islands.
Negotiations with such important trading partners as the United States, European Union, China and India have not even started yet. Especially, with the United States, some groundwork needs to be done before official talks could begin.
In contrast, China has been moving swiftly to conclude FTAs with diverse countries, posing threat to Korea. For example, its free trade deal with the 10-member Association of Southeast Asian Nations went into effect on July 1, spelling trouble for Korean exporters in both Chinese and ASEAN markets.
To accelerate FTA negotiations, it is necessary for the government to enunciate its stance regarding such sensitive issues as the adjustment of the screen quota system and the opening of the agricultural market. But policymakers have been reluctant to face up to these thorny issues. It’s high time they removed these hurdles to free trade.
At the same time, the government needs to promote trade arrangements with Middle East countries to secure oil supply and expand exports. Since oil prices began to surge in 2000, these countries have been spending their huge oil dollars on importing foreign goods. Asian countries, including Singapore and China, have already signed or agreed to sign FTAs with major oil producing countries of the region.
