logo logo

On the free trade track

Korea Herald


On the free trade track

15 December 2005

Korea has taken another step forward in its pursuit of free trade agreements by signing the framework agreement with ASEAN on Tuesday. It should provide new momentum toward launching or accelerating talks with more trading partners, including the United States, Japan and China.

Korea and the 10-nation Association of Southeast Asian Nations need to do more work before they complete negotiations by the end of next year, as hoped by Seoul officials. It is encouraging nonetheless that Thailand, which took issue with rice imports, joined the other nine nations in signing the framework agreement.

A full agreement with ASEAN, with a combined population of 540 million people, would certainly boost Korean exports significantly. Korea has a free trade agreement with three partners, Chile, Singapore and the four-nation European Free Trade Association, all small economies to expect large benefits.

Given Korea’s dependence on exports, one cannot emphasize too much the urgency of free trade agreements with ASEAN and other major economies like the United States, Japan, China and the European Union. This is all the more important because multilateral free trade talks, as seen in the negotiations for the Doha Development Agenda, are too complicated, too time-consuming and too inflexible to serve our individual interests. This does not mean, of course, Korea should not work hard to help the WTO ministerial talks, now underway in Hong Kong, to find a compromise.

What we need to do is prepare for a freer trade, either in the form of a multilateral mechanism or bilateral trade agreements, by strengthening the competitiveness of domestic industries, particularly the agriculture and service sectors.

Korea has had enough lessons that agriculture is one of the toughest areas in free trade negotiations because of its political sensitivity. The U.S. demand to remove the "screen quota system" is also an example of the service sector posing challenges to a Korea-U.S. bilateral free trade accord. It is important to build a broader public awareness of benefits from free trade, which is the job of the government.