Korea.net | January 08, 2008
Korea mulls FTA with Southern African countries
Korea is considering a free trade pact with the the Southern African Customs Union (SACU) to expand cooperative ties with resource-rich countries, the government said Tuesday (Jan. 8).
The Ministry of Finance and Economy said the establishment of a free trade agreement (FTA) with the five member union could promote Seoul’s efforts to participate in a greater number of resources development projects, while helping those countries build up vital social infrastructure networks.
Resource-poor Korea has engaged in the so-called packaged approach, where local companies build roads, railways, power generation and petrochemical plants in exchange for a chance to take part in resource development projects.
The ministry also said an FTA with South Africa, Botswana, Lesotho, Namibia and Swaziland would allow Korea to expand preferential loans and aid to African countries that can enhance the country’s positive image on the continent.
It said while soft loans and aid totaled $35 million and $26 million respectively in 2006, Seoul plans to increase the former to $700 million by 2011. Aid will be increased to 61 million by 2009.
Africa is gaining importance with global raw materials prices going up in the face of greater demand and dwindling supply.
The continent’s undeveloped reserves of oil and gas and other resources have help push up average annual economic growth to 5.5 percent in 2007.
Korea’s main rivals for natural resources like Japan and China have also stepped up efforts to strengthen ties with the region.
Seoul currently has FTAs with Chile, Singapore, and the European Free Trade Association made up of Switzerland, Norway, Ireland, Lichtenstein and the Association of Southeast Asian Nations. It formally signed a deal with the United States with the United States in late June that is waiting ratification, and is holding talks with the European Union, Canada, Mexico and India.