Fruit stalls Korea-Colombia FTA
Korea Times | 07-12-2011
Fruit stalls Korea-Colombia FTA
By Kwaak Je-yup
Both Korea and Colombia agree in principle on the need for a fast free trade agreement (FTA) but they just cannot nail it because Korea is not ready to accommodate what Colombia wants ― better terms for its fruits and flowers than what Korea gives Peru and Chile.
Sergio Diaz-Granados, minister of commerce, industry and tourism of Colombia, has a reason to press Korea on this because of a huge gap in his country’s trade with Korea. The minister was still speaking of mutual benefits for both countries without showing any hint of frustration.
“What Korea needs is what Colombia has; what Colombia needs is what Korea has,” said Diaz-Granados in a Korea Times interview Tuesday in Seoul.
But the ultimate details of the Free Trade Agreement (FTA) are yet to be agreed upon; according to the officials of the Ministry of Foreign Affairs and Trade, the Colombian delegation may not be returning home with what they came to Korea for.
A Korean negotiator insisted both sides were committed to a speedy trade agreement, however. Calling the South American nation an “attractive market,” with lucrative investment opportunities, he said the negotiations on agricultural produce will be the most difficult, unable to “give more” to Colombia than to neighboring Peru and Chile, which already have FTAs with Korea in effect.
Korea Trade-Investment Promotion Agency (KOTRA) officials declined to comment on ongoing trade negotiations.
Diaz-Granados is in Korea to promote the September visit of his president Juan Manuel Santos and to negotiate the trade terms with Trade Minister Kim Jong-hoon, his counterpart.
Diaz-Granados said he hoped to close the large trade deficit currently incurred from Korean imports by exporting the country’s agricultural products, like tropical fruits and flowers.
According to the KOTRA data, Korea buys mainly black coal, ferroalloys, and coffee from Colombia and sells automobiles and other car parts. The KOTRA figures show almost $ 4.3 billion in trade surplus from 2006 to 2010, and until May this year, Korea has gained another $ 450 million from Colombia.
“I understand some (agricultural) products...like beef are sensitive to Korea, but Colombia has a strong automotive sector that is just as sensitive,” said Diaz-Granados. “We need to focus on the future of both countries.”
Since 2002, after liberal president Alvaro Uribe took office, Colombia has made formidable progress cutting crime and boosting commerce. In March this year, ratings agency Standard & Poor’s raised the country to investment grade, at BBB-, on par with Brazil and Peru, after the 11-year stint in the junk category. Competitors Fitch and Moody’s quickly followed suit.
For an emerging economy like Colombia, Diaz-Granados said the international trade agreements and investment treaties are the methods to create jobs and “predictable rules to promote exports” ― to prosperity.
“People (in Colombia) are not afraid of competition,” said the minister. “They are demanding competitiveness measures, like roads, training for human resources, IT and technology.”
Colombia has pushed through FTAs, the most recent of which to go into effect is with Switzerland, on July 1. Canada is also open for business on August 15. The most famous and crucial agreement with its largest trading partner the U.S., however, has stalled in American legislative bodies.
Concerning the not-so-positive images associated with his country, especially with regards to drug trafficking and violence, he commented.
“I heard once that the worst thing for a country to be on the front pages,” said Diaz-Granados, alluding to the barrage of bad foreign press his country has received over the last couple of decades. “There is a big difference in perception and reality. Security is no longer an issue."
