Three Free Trade Zones Expected in July

The Economic Free Trade Zone Act will take into effect this coming July, and three ports are planned for designation as such, including Incheon International Airport, Busan Port and Kwonyang Port, announced the South Korean government.

The "project manager" system is also to be ushered in to handle difficulties faced by multinational companies engaged in business in South Korea. The system, now implemented in advanced countries like Britain, will appoint an official for each investment project to give consistent assistance and service to companies from the establishment of factories to performance of business operations.

The new measures were made public yesterday during the luncheon meeting hosted by President Roh Moo-huyn for foreign CEOs working in South Korea, said Commerce, Industry and Energy Minister Yoon Jin-shik.

In order to effectuate the measures, ministries such as the Finance and Economy Ministry and Ministry of Commerce, Industry and Energy are working on an enforcement decree. In addition, a special committee is to be set up, consisting of various ministers, and will be headed by Deputy Prime Minister of Economy Kim Jin-pyo. To assist the committee in putting the measures into practice, a support board is to be set up within the Finance and Economy Ministry.

The ministry is reportedly planning to reduce the corporate tax rate equal to or lower than that imposed by other countries in competition with South Korea, a long-term plan aimed at inducing more foreign investment.

At the luncheon, President Roh stated: "I intend to eliminate various regulations hindering free corporate activities. Moreover, our taxation system will be streamlined to relieve the burden on the part of foreign companies. My administration will do its best to establish dialog and compromise as a principle in resolving labor disputes. In two years, I will raise the competitiveness of South Korea`s labor market from the current rank of 40th to within the top 20."

As to the mounting crisis over North Korea`s nuclear program, he confidently said, "In a nutshell, there will be no war or confusion whatsoever."

In the meanwhile, President Roh discussed the North Korean nuclear issue with a former U.S. ambassador at the Blue House.

Young-Hae Choi yhchoi65@donga.com