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More FTAs for Korea

Publication Date : 10-02-2014

 

Many opposition lawmakers and civic group activists here vehemently opposed the signing of the Korea-US Free Trade Agreement, which took effect in March 2012. They argued the terms of the accord were biased in favour of US interests, expressing concerns over its possible negative effects on local industries.

The opponents of the KORUS deal, however, must have felt embarrassed with the figures released last week by Seoul’s Ministry of Trade, Industry and Energy, which showed Korea’s trade surplus with the US jumped by 35 per cent from a year earlier to US$20.5 billion in 2013. The country exported $62 billion worth of goods to the US last year, up 6 per cent from 2012, while seeing imports from the US decline by 4.2 per cent to $41.5 billion.

Korea has also benefited from its free trade accord with Turkey, which came into force last May. Its exports to Turkey recorded a year-on-year increase of 20 per cent in 2013 after decreasing by more than 10 per cent the previous year.

The US and Turkey are among the 48 nations covered by the 10 FTAs that Korea has concluded with individual states or regional blocs such as the European Union and the Association of Southeast Asian Nations. President Park Geun-hye made no exaggeration when she said in her news conference in January that Korea was well ahead of its major economic rival Japan in terms of external trade pacts.

Except for Chile and Israel, Korea is the only country that has signed a free trade accord with both the EU and the US. Its FTA partners account for more than half of the world’s gross domestic product.

Korea has been heading in the right direction by making active efforts to conclude free trade deals with foreign countries since signing its first FTA with Chile in 2003. Such endeavours have helped the nation establish itself as one of the world’s 10 largest trading powers.

Korea is pushing to conclude new trade pacts this year with Australia, Canada. China, Indonesia and New Zealand. Including these countries would expand its FTA partners’ proportion of global GDP to more than 70 per cent. In addition, it has been engaged in negotiations with several other countries to upgrade existing bilateral agreements.

Certainly, continuous and strenuous efforts to further expand free trade schemes will be necessary for boosting Korea’s economy, which is facing more difficulties than its Asian rivals in catching up with economic growth of advanced nations. But there also seems to be a need for it to pay heed to concerns over an increasing shortage of skilled negotiating manpower.

As part of an overhaul of the government’s organizational chart, President Park transferred the trade negotiating authority from the Foreign Ministry to the Industry Ministry after she took office a year ago. Many experts in FTA negotiations have since returned to the Foreign Ministry and more than a dozen others are expected to do so in the coming years.

It is worrisome that a task force in charge of preparing for negotiations on entry into the US-led Trans-Pacific Partnership trade agreement has not yet been set up. The lack of experienced negotiators may also hamper progress in existing FTA talks.

President Park hoped that business interests would be better reflected in external trade negotiations by assigning the task to the Industry Ministry. Her intention may be understandable but there is the possibility that the focus on local demands will not be in keeping with global standards and trends.

It is necessary now to work out and implement effective measures to augment the negotiating staff by preventing the exit of experienced negotiators and recruiting more experts from the private sector. The pace of existing FTA talks may also have to be adjusted to avoid the overstretch of the relevant manpower.

 

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