Korea now plans to expand free trade aggressively
February 1, 2006
Korea now plans to expand free trade aggressively
by Hong Byeong-gee
February 01, 2006 ㅡ After reaching free trade agreements with relatively small economies such as Chile and Singapore, Korea is looking to expand its horizons as it prepares to launch free trade negotiations with two of the world’s leading economies.
The Korean government is expected to officially announce as early as tomorrow the opening of free trade talks with the United States. And early next week, it will likely announce the beginning of talks for a closer economic partnership agreement, a variant form of free trade agreement, with India, coinciding with the scheduled visit of Indian President Abdul Kalam next Monday.
At the end of last year, there were 186 free trade agreements in effect around the world, with 240 negotiations taking place. The trade among countries with free trade agreements accounted for nearly half of global trade last year.
Korea, however, is not yet a strong player in free trade markets, having only reached deals with Chile, Singapore, and the European Free Trade Association.
Korea has since moved into a higher gear in its free trade talks. The first round of negotiations with Mexico will begin next Tuesday, and additional talks with the Association of South East Asian Nations and Canada will start on Saturday and Feb. 13, respectively. The government’s goal is to get free trade negotiations started with up to 50 nations and sign deals with 15 of them by 2007.
And yet the two most significant partners for Korea are the United States and India. If Korea reaches free trade deals with them, the national economy is expected to receive a significant boost.
"So far, the government’s selection of free trade partners has reflected its desire to minimize damage to local industries," said Lee Hong-shik, head of the free trade agreement team at the Korea Institute for International Economic Policy. "But the latest negotiation partners indicate that the government now wants to maximize profit from free trade."
With Japan having reached free trade deals with Singapore and Mexico, while China has agreed to a deal with ASEAN, industry analysts say Korea cannot afford to delay free trade talks, especially given that more trade than ever is done within blocs of countries with free trade agreements among themselves.
The free trade agreements can also have a positive impact on the domestic economy. Since such deals eliminate tariffs on trade, they could help increase the amount of exports for Korea while bringing in inexpensive raw materials from its free trade partners.
Free trade agreements would also allow Korean-educated doctors to open clinics in nations that have free trade agreements with Korea without going through new rounds of tests to obtain licenses.
