FTA negotiations with China to begin within first half of this
year’
This is the first of a series of interviews of top officials on FTAs as the Korea-U.S. FTA takes effect on March 15. ― Ed.
The free trade agreement with the United States, which goes into effect Thursday, is anticipated to help Korea attract foreign investment in addition to boosting exports to the world’s largest market.
“Being a country that depends heavily on trade, our competence means strong exports to the advanced economy, which accounts for 23 percent of the world’s production and has the highest consumer standards,” Trade Minister Bark Tae-ho said in an interview with The Korea Herald.
“If we do well in the U.S. market, we can do well around the world.”
The United States, which had been Korea’s largest trading partner until 2003 when it was overtaken by China, was ranked fourth largest last year after China, Japan and the European Union. Korean products’ U.S. market share also fell from more than 3 percent in 2004 to 2.6 percent last year.
To maximize the effect of the Korea-U.S. FTA, the Seoul government will continue to educate small companies on how to get origin certifications for their export items and how to make use of the preferential duties, Bark said.
The professor-turned-minister said opposition politicians’ demands for a renegotiation or scrapping of the Korea-U.S. FTA were “irresponsible, inappropriate and unacceptable,” saying that problems and disputes over the FTA can be discussed through various joint committees between the two countries.
“Repealing the FTA would hurt bilateral relations and undermine Korea’s international credibility. Most importantly, it would be a major loss to our national interests,” he said.
As Korea is engaging in consultations for an FTA with China, it will soon emerge as the hub of FTAs binding the three largest economies of the world including the EU and therefore one of the most attractive investment destinations in the world, Bark said.
“Foreign investors often complain about the regulatory regime and the labor relations in Korea, but they will be willing to overcome such difficulties once Korea becomes the hub of FTAs,” he said.
“Korea will serve as a gateway for American, European and Chinese investors seeking access to these enormous and dynamic markets.”
The negotiations for the Korea-China FTA are expected to begin in the first half of this year, according to Bark.
The two sides plan to issue a joint statement on the basic framework of the talks, which will consist of two stages, when they announce the beginning of the negotiations.
The first stage will be on settling the sizes of baskets for general, sensitive and ultra-sensitive items. The second stage talks will not proceed unless the two countries reach an agreement in the first stage.
“Through the FTA with China, we should achieve market dominance in the world’s fastest growing economy, where some 30 cities the size of Bundang are springing up each year,” Bark said.
“The Chinese government is shifting the focus of its policy for economic growth from exports to domestic consumption, for which they are providing subsidies.”
Most of Korea’s trade surplus with China comes from processing trade in which Korean companies in China import machinery, parts and raw materials from their parent companies in Korea. A lot of the products assembled in China are sold off to the United States or the EU, and therefore get tariff refunds.
“China doesn’t like this. They are reducing incentives for exporters, and with labor costs in China rising, many Korean companies are returning home,” Bark said.
“By sealing an FTA with China, we would no longer have to produce in China to tap into its market. Foreign companies targeting the Chinese market could come to Korea for production.”
Also, an FTA would help remove non-tariff barriers and make Beijing’s attitude more favorable toward Seoul when dealing with trade problems, according to the minister.
The former professor at Seoul National University’s Graduate School of International Studies took office as trade minister in December.
By Kim So-hyun (sophie@heraldm.com)
This is the first of a series of interviews of top officials on FTAs as the Korea-U.S. FTA takes effect on March 15. ― Ed.
The free trade agreement with the United States, which goes into effect Thursday, is anticipated to help Korea attract foreign investment in addition to boosting exports to the world’s largest market.
“Being a country that depends heavily on trade, our competence means strong exports to the advanced economy, which accounts for 23 percent of the world’s production and has the highest consumer standards,” Trade Minister Bark Tae-ho said in an interview with The Korea Herald.
“If we do well in the U.S. market, we can do well around the world.”
The United States, which had been Korea’s largest trading partner until 2003 when it was overtaken by China, was ranked fourth largest last year after China, Japan and the European Union. Korean products’ U.S. market share also fell from more than 3 percent in 2004 to 2.6 percent last year.
To maximize the effect of the Korea-U.S. FTA, the Seoul government will continue to educate small companies on how to get origin certifications for their export items and how to make use of the preferential duties, Bark said.
The professor-turned-minister said opposition politicians’ demands for a renegotiation or scrapping of the Korea-U.S. FTA were “irresponsible, inappropriate and unacceptable,” saying that problems and disputes over the FTA can be discussed through various joint committees between the two countries.
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| Bark Tae-ho |
“Repealing the FTA would hurt bilateral relations and undermine Korea’s international credibility. Most importantly, it would be a major loss to our national interests,” he said.
As Korea is engaging in consultations for an FTA with China, it will soon emerge as the hub of FTAs binding the three largest economies of the world including the EU and therefore one of the most attractive investment destinations in the world, Bark said.
“Foreign investors often complain about the regulatory regime and the labor relations in Korea, but they will be willing to overcome such difficulties once Korea becomes the hub of FTAs,” he said.
“Korea will serve as a gateway for American, European and Chinese investors seeking access to these enormous and dynamic markets.”
The negotiations for the Korea-China FTA are expected to begin in the first half of this year, according to Bark.
The two sides plan to issue a joint statement on the basic framework of the talks, which will consist of two stages, when they announce the beginning of the negotiations.
The first stage will be on settling the sizes of baskets for general, sensitive and ultra-sensitive items. The second stage talks will not proceed unless the two countries reach an agreement in the first stage.
“Through the FTA with China, we should achieve market dominance in the world’s fastest growing economy, where some 30 cities the size of Bundang are springing up each year,” Bark said.
“The Chinese government is shifting the focus of its policy for economic growth from exports to domestic consumption, for which they are providing subsidies.”
Most of Korea’s trade surplus with China comes from processing trade in which Korean companies in China import machinery, parts and raw materials from their parent companies in Korea. A lot of the products assembled in China are sold off to the United States or the EU, and therefore get tariff refunds.
“China doesn’t like this. They are reducing incentives for exporters, and with labor costs in China rising, many Korean companies are returning home,” Bark said.
“By sealing an FTA with China, we would no longer have to produce in China to tap into its market. Foreign companies targeting the Chinese market could come to Korea for production.”
Also, an FTA would help remove non-tariff barriers and make Beijing’s attitude more favorable toward Seoul when dealing with trade problems, according to the minister.
The former professor at Seoul National University’s Graduate School of International Studies took office as trade minister in December.
By Kim So-hyun (sophie@heraldm.com)
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