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FTA Might Save Yearly 34 Billion Dollars

Posted March. 22, 2002 09:07,   


The insist is getting tough that we should take the visit of Japanese Prime Minister Koizumi Junichiro the chance to form a Free Trade Agreement (FTA) with other countries like Japan and Chile.

During the visit of Prime Minister Koizumi to Korea, he will have a summit talk with president Kim Dae-Jung, and discuss the establishment of `joint research commission` of government officials and private experts, which will prepare for the content of bilateral FTA, expecting the agreement on FTA.

Three economic bodies of the Federation of Korean Industries (FKI), Korea Chamber of Commerce and Industry (KCCI) and Korea International Trade Association (KITA) along with Korea Institute for International Economic Policy (KIEP) held a seminar at KITA building on the 19th, and unanimously said, “we should gain public agreement on FTA not to be inflicted with a loss. ”

Dr. Jeong In-Gyo from KIEP said, “there are 172 FTAs in the world with 68 new FTAs under formation. Korea is the only country except China that has no FTA among World Trade Organization (WTO) countries. Hence, opportunity cost reaches some 34 billion dollars in a year. ”

Dr. Jeong said, “Korean enterprises are treated discriminated from the countries under FTA as U.S. excluded North American Free Trade Agreement (NAFTA) countries from tariff object when it took the safeguard measure on steel. ”

Deputy executive chairperson FKI Sohn Byung-Doo said, “some industrial circles are standing against bilateral FTA between Korea and Japan, but it should be contracted early for the future of Korea. ”

Park Yong-Sung president of KCCI stressed, “world No. 13 trader Korea should not obstinately adhere to shutting doors in agricultural field. The issue of opening agricultural market, which is core subject of FTA, should be discussed publicly. ”

The government also is likely to positively process the formation of FTA considering the difficulties of enterprises. But the protest of agricultural circles is still a trouble.

Lee Sung-Joo, direct general of multilateral trade bureau at the Ministry of Foreign Affairs and Trade (MOFAT) said, “Korea is afflicted with disadvantages as Korea does not join the world wide `FTA network`. We are going to have 5th FTA meeting with Chile in July, which will be set up before the end of this year. ”

In relation to the bilateral FTA with Japan, direct general Lee said, “it will be actively proceeded after two year`s examination by the government-citizen joint research commission. ”

Free Trade Agreement (FTA) is the agreement that liberalizes the movement of merchandizes to contracted countries. By clearing up the barriers like tariff and quota system, trade becomes as free as within one country. In fact, it becomes `one market` by removing barrier of tariff and considerable non-tariff barrier.

Ja-Ryong Koo bonhong@donga.com