Posted May. 17, 2006 07:04,
On May 16, Korea and the Association of Southeast Asian Nations (ASEAN) reached an agreement on the modality for freeing their goods, a core part of a free trade agreement (FTA). Under the agreement, the goods produced in North Koreas Gaesong industrial complex will be recognized as Korean if the products meet certain terms.
The Office of the Minister for Trade announced that Trade Minister Kim Hyun-jong and trade ministers from nine ASEAN members signed an agreement on FTA goods trade on this day in Manila, the Philippines, leaving out Thailand for the time being.
The Korean government plans to ask the National Assembly to ratify the agreement in the regular session in September so that it can take effect within this year.
Only 100 items out of the products made in Gaesong industrial complex will be recognized as Made in Korea, as long as more than 60 percent of the materials from which they are made are of South Korean origin or if the added value of South Korean materials put in the product is more than 40 percent.
Kim Han-soo, FTA bureau chief, said, If needed, Korea can make a request for a change in the items recognized as Korean made.
According to the agreement, Korea and ASEAN are bound to remove tariffs on 90 percent of the number of import items and of the import amount respectively by 2010.
Tariffs on sensitive items including squid, mushroom, and pumpkin will be lowered to 0 ~ 5 percent by 2016. Highly sensitive items will be excluded from the market opening and be protected by means of a limited level of tariff cut by 2016 or a tariff rate quota.
Forty-five items such as rice, chicken meat, live or frozen fish, and most fruits are protected from the opening.
The Office of Minister for Trade said, This is the first FTA which Korea signed with the fifth largest export market. And it also predicted, In the mid to long term, the FTA with ASEAN is expected to increase Korean exports to the ASEAN region by $10 billion and trade surplus by about $6 billion annually.