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Trade minister selling FTA to US and Koreans

JoongAng Ilbo, Korea

Trade minister selling FTA to U.S. and Koreans

by Kim Hyun-chong

11 February 2006

Only a few years ago, the idea of signing free-trade deals was new to Koreans. But after signing such agreements with Chile and Singapore, and after the opening of free-trade talks with the United States was announced, free trade is now at the forefront of the national discourse.

Kim Hyun-chong, trade minister at the Ministry of Foreign Affairs and Trade, recently sat down to talk with the JoongAng Ilbo about his rather daunting work schedule.

Q. The discussions leading to the opening of Korea-U.S. free-trade talks seem to have taken place quickly. How did they start in the first place?

A. In the past, Korea had not done well in bilateral or multilateral talks. After I was named trade coordinator [in May 2003], I began pushing for a free-trade deal with the United States, but Washington wasn’t really interested. But as we showed a willingness to open our markets during the Doha Development Agenda talks, the U.S. side took notice.

As we started working toward a free-trade agreement with Canada in 2004, the United States became really interested in talking with us. Canada was seeking an economic partner in Asia, and its deputy minister of international trade at the time [Leonard J. Edwards] had been an ambassador to Korea, and that helped speed up our talks.

And then during the 2004 Asia-Pacific Economic Cooperation meetings in Chile, Robert Zoellick, who was the U.S. trade representative at the time, suggested that Korea and the United States discuss the possibility of free trade. After the Korea-U.S. summit last year, things became more serious.

There was some recent progress made also that led to the opening of the free-trade talks, such as lifting the import ban on U.S. beef and reducing the screen quota.
Were there particular reasons for these quick steps?

We have been very well prepared for negotiating the free-trade agreement. We surprised the U.S. delegation during the preliminary talks with the amount of our research on their existing free-trade deals.

We visited the U.S. Congress in July and September last year to help stir up U.S. public support for the Korea-U.S. free-trade agreement. We tried to convince members of Congress by stressing that Korea had fought wars alongside the United States, but that what was now needed was an economic alliance.

We met with some members who served during the Korean War, and crunched numbers for the U.S. business leaders to show them the positive impact of the free-trade deal for both nations. As time passed, we could feel the U.S. side was leaning toward negotiations.

A Korea-U.S. free-trade deal is sometimes considered a necessary evil to lead Korea to an open-market economy, but some say it may not be beneficial to Korea.
For Korea, a free-trade agreement with a giant economy like the United States would be like an invisible infrastructure because of our strong reliance on exports for our economy. We will learn from the United States, compete with them in some areas, and have the opportunity to grow into a developed economy.

It’s been more than a decade since our national per capita income surpassed the $10,000-mark, and we still haven’t reached $20,000. That tells me we now have to find new ways to grow, and the most pressing needs to allow that to happen are reform and open markets. The free-trade deal will help us take that next step.
In the past, we focused largely on building physical infrastructure. In the 21st century, free-trade deals must become the new infrastructure around which we can build an advanced economic system based on reform and open markets.

Free trade with the United States will help create jobs, if, for instance, we could have our nurses and veterinarians work without separate licenses in the United States because of the deal. Also, we will be able to establish direct networks with U.S. business communities.

Perhaps negotiating with other officials here will be more challenging than discussions with the United States.

Last fall, I told President Roh Moo-hyun that for us to become a developed economy, we would need a Korea-U.S. free-trade agreement. I assured him that we would try to get the best results possible, and he said if it’s something that we need, we should go for it. The president is aware that a Korea-U.S. deal is necessary for Korea to reach $30,000 in national per capita income, and that should help us convince the rest of the country.

How was the decision to cut the screen quota reached?

The screen quota had been a stumbling block to Korea-U.S. trade talks since we began talks on a bilateral investment treaty in 1999, and the decision wasn’t based only on the free-trade talks. Korean films’ market share has risen to nearly 60 percent in the last two years, and we felt that our movies had become competitive enough. But there won’t be any more reduction to the 73 days that we’ve settled on.

Is it possible to complete the talks by March?

Timing is everything in negotiations. It won’t be easy, but I am optimistic that it will get done in time.