Merchandise FTA with five ASEAN countries to take effect next month
Yonhap News, Seoul
Merchandise FTA with five ASEAN countries to take effect next month
30 May 2007
SEOUL, May 30 (Yonhap) — A merchandise free trade agreement between South Korea and five member countries of the Association of Southeast Asian Nations (ASEAN) will take effect on June 1, officials said Wednesday.
South Korea and nine out of the 10 member states of ASEAN, excluding Thailand, reached the agreement last year, aimed at liberalizing merchandise trade by 2010. The free trade pact, South Korea’s first deal with an economic bloc, was ratified by the National Assembly on April 2.
The five countries are Vietnam, Myanmar, Singapore, Malaysia and Indonesia, said the officials at the Ministry of Foreign Affairs and Trade. The pact with Brunei, the Philippines, Cambodia and Laos is expected to go into effect in July or August when the countries complete their internal procedures.
ASEAN is South Korea’s fifth-largest trading partner and more than 2 million South Koreans travel to ASEAN countries every year.
Two-way trade volume reached US$53.5 billion in 2005, accounting for 9.8 percent of South Korea’s total trade, while South Korean firms invested over $12.5 billion in the countries that year.
Under the agreement, South Korea and ASEAN will liberalize merchandise trade between the two sides by 2010. South Korea will abolish tariffs on 4,742 items by 2010. Of the items on which tariffs are to be abolished, Seoul will immediately scrap tariffs on about 70 percent from June 1, according to officials.
ASEAN countries also agreed to give preferential tariffs on 100 items manufactured in the inter-Korean business complex in North Korea’s border city of Kaesong.
To reach a free trade accord on nonmerchandise, South Korea and ASEAN have to hold open talks on trade in services and investment. They are aiming to conclude the agreement by the end of the year.
Thailand, an ASEAN member country, stayed out of the agreement in May due to differences over the rice market opening. But the country came back to the negotiation table in April.
South Korea has signed FTAs with Chile and Singapore. It is also pushing for a pact with Canada and is set to conduct a second feasibility study with China this year.
South Korea and the United States reached a landmark free trade accord in April after 10 months of grueling negotiations.
The deal, widely expected to be signed by the end of June, must be ratified by the legislative bodies of both sides. The two countries will hold talks from May 29 to June 6 in Washington to finalize a legal review process for a complete text.
Meanwhile, last month in Seoul South Korea held the first round of negotiation talks with the European Union for similar trade pact. Seoul officials hope the deal will be completed within a year.
