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Korea on Tuesday concluded free trade agreements with nine of the 10 members of the Association of Southeast Asian Nations on manufactured and agricultural goods in Manila, the Philippines, the Ministry of Foreign Affairs and Trade said Tuesday. Some agricultural and marine products including rice, beef, chicken, garlic, chili peppers and onions were put on a reserved list. Only Thailand declined to sign.
ASEAN, Korea¡¯s fourth largest export market, is the third to treat goods produced at the joint-Korean Kaesong Industrial Complex in the North as made-in-South Korea, after Singapore and the European Free Trade Association (EFTA) in 2004 and 2005 respectively. But that will cover only some 100 items such as clothes produced in the complex when the final FTA with the Southeast Asian bloc is signed.
¡°We had very little conflict over the issue with Singapore, which imposed no import tariffs at all, and EFTA members including Switzerland whose trade deal with us was primarily focused on technology-intensive products,¡± a ministry official said. ¡°But the FTA negotiations with ASEAN were not easy because member countries thought their products are in direct competition with goods produced in the complex, most of which are low-priced manufactured goods.¡±
The issue has figured highly in all the government¡¯s market opening and FTA negotiations since the complex went into operation in 2004. One reason is that Seoul wants to help North Korea open to the world and expand inter-Korean cooperation. ¡°The Kaesong Industrial Complex is regarded as a top priority that needs to be included even if it means making additional concessions,¡± a government official says.
But the matter causes problems every time because it conflicts with World Trade Organization regulations on tariff exemptions on goods produced in third countries. However, some ASEAN members in negotiations agreed to make an exception for at least one item produced in the complex as a symbolic gesture, even if it goes against WTO regulations.
The Kaesong Complex looms as an obstacle in future FTA negotiations too. Canada, with which Korea started FTA negotiations last July, and especially the U.S., with which negotiations are to start next month, are unwilling to make an exception. The U.S. is very sensitive about the issue because of its nuclear dispute with North Korea.
Meanwhile, Korea is also embarking on preliminary FTA negotiations with the EU, the ministry said. The 25-member EU is the nation¡¯s third largest export market with US$43.7 billion worth of exports in 2005, after China and the U.S. That FTA is tipped to have a substantial impact on the domestic industry as a whole, particularly the manufacturing, agricultural and service industry.
Trade Minister Kim Hyun-chong and EU Trade Commissioner Peter Mandelson met on the day in Manila and agreed they will soon start working-level preliminary talks, the ministry said. If negotiations progress as planned, Korea will start official FTA negotiations with the EU within a year.
(englishnews@chosun.com )
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