Free trade agreements: complicated but unavoidable
Korea Herald
Free trade agreements: complicated but unavoidable
By Cho Chi-hyoung
10 May 2006
The main theme of the 16th Inter-Pacific Bar Association Conference, held in Sydney last week, was free trade agreements. As the latest World Trade Organization round loses momentum countries are increasingly turning to FTAs to boost trade and consequently economic growth. Korea has had effective FTAs with Chile since April 2004 and Singapore since March 2 this year, while agreements with the Association of Southeast Asian Nations and the European Free Trade Association are in progress. In February, Korea and the United States announced their intention to negotiate a bilateral FTA, and the Ministry of Foreign Affairs and Trade is contemplating 20 FTAs in all.
Certainly, FTAs are becoming an ever more influential part of the economic and political landscape throughout the Pacific Rim. Since the FTA negotiation and ratification process generally politicizes bilateral trade disputes in Korea, it is ever more crucial for the Korean legal profession to assist in negotiations and to prepare for the possible effect of FTAs on all areas of law.
The Sydney conference provided a forum to illustrate the enormous impact FTAs have on the economic and social aspects of their respective countries and the legal issues underlying them. Some of the main topics discussed at the conference were: trade remedies under FTAs and existing WTO and national rules; the increasing frequency of cross-border legal cases; international construction projects engaged by multinational partners; the legal framework of bilateral investment treaties and issues such as property guarantees; employment and immigration law under borderless employment; borderless insurance; intellectual property protection issues under FTAs; and international insolvency issues.
Yet, Pacific Rim countries have been exceedingly varied in terms of the regulatory liberalization progress of trade, investment, employment and immigration. For instance, Japan, Korea, India and China have widely varying foreign exchange and financial activity regulations. Thus, close communication between lawyers in different countries is crucial and should benefit government officials in directing the degree of regulatory liberalization and the development of laws. Such cross-border attorney relationships will broaden the understanding of the unique legal, cultural and economic environments and help business clients prosper in the highly diverse Asia-Pacific region.
In Korea, FTA negotiations involve not only trade tariffs and quotas and the permissible scope and manner of investment, but inevitably touch upon culture and the basic relationships between people living under existing systems of society and law, such as seen with the screen quota and employment protection issues in Korea. This causes conflicts between exporting industries and domestic import-competing groups, as observed by applause coming from the electronics sector and fierce protests from agriculture. In addition, the North Korean issue may be an obstacle to concluding an FTA with the United States.
We live in an era of an ever more complicated global village. FTAs should be used as tools to enlarge the involved countries’ understanding of their own and their counterparts’ living conditions and to contribute to mutually better lives.
Cho Chi-hyoung is a partner and an attorney-at-law at Hwang Mok Park P.C., one of Korea’s leading law firms.
