Yonhap News World Service | 17 November 2004

Roh, Lula Agree to Launch Feasibility Study into Korea-Mercosur FTA

BRASILIA, Nov. 16 (Yonhap) — South Korea and Brazil Tuesday agreed to launch a joint feasibility study into signing a Free Trade Agreement between South Korea and the South American common market of Mercosur, of which Brazil is a member together with Argentina, Uruguay and Paraguay.

The agreement was made at a summit meeting between President Roh Moo-hyun and Brazilian President Luiz Inacio Lula da Silva held at the presidential palace here.

Roh also agreed with Argentine President Nestor Carlos Kirchner in Buenos Aires on Monday to conduct a feasibility study into a possible South Korea-Mercosur FTA.

Roh flew in to Brasilia earlier in the day on the second leg of his tour of three South American nations to discuss enhancing economic cooperation and to seek support for Seoul’s efforts to resolve the North Korean nuclear arms issue peacefully.

Brazil is one of the so-called BRIC countries, an acronym grouping Brazil, Russia, India, and China together with their common status as emerging economies with large potential markets.

Since his inauguration in February last year, Roh has now visited all four BRIC nations which many economists say will play increasingly important roles in the world’s economy in the future.

At the end of the summit, Roh and Lula issued a 14-point joint statement expressing their understanding that the two sides need to further enhance bilateral economic cooperation and make greater use of the complementary economic structures of the two nations.

The statement called for upgrading their bilateral relationship to a "comprehensive cooperative partnership in the 21st century" from a "special partnership in the 21st century" which was agreed to in January 2001 when then Brazilian President Fernando Henrique Cardoso visited to South Korea to meet with then President Kim Dae-jung.

The Brazilian President also agreed to help South Korea’s bid to join the Inter-American Development Bank (IDB).

Brazil had been opposed to South Korea’s entry to the IDB out of fears Seoul would too aggressively compete in the regional government procurement market worth $14 billion currently dominated by Brazil.

The two sides agreed to assist South Korean firms take part in the projects for energy exploration and construction of highways, railways and port facilities in Brazil.

They also agreed to work together to make ongoing Doha Development Agenda (DDA) multilateral trade negotiations a success so global trade liberalization can occur sooner.

Roh and Lula agreed to have South Korean firms establish an information technology center in Brazil soon to allow for greater bilateral cooperation in the IT sector.

Roh will meet with Brazilian parliamentary leaders and attend an official dinner meeting with Lula later in the day before flying to Sao Paulo to speak at a meeting of business leaders from South Korea and Brazil, meet with Korean residents and visit a trade exhibition there.