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Ratify EU, US Free Trade Deals Early

Posted October. 07, 2010 00:26,   


Korea and the European Union officially signed a free trade agreement Wednesday three years and five months after starting negotiations. If the deal is ratified by their parliaments, it will take effect on July 1 next year. It requires approval from the European Parliament and will undergo ratification processes in each of the 27 EU member countries. Korea’s parliament should promptly ratify the deal for the country’s economic interests. The European Parliament and all EU member countries should also strive for early ratification of the deal.

Beginning with a free trade agreement with Chile that took effect on April 1, 2004, Korea has negotiated such deals with 45 countries and ratified five of them. Five years after the Chile accord took effect, Korea became the Latin American country’s fifth-largest trading partner last year. Korea’s trade with India is also rapidly growing after their comprehensive economic partnership agreement took effect in January this year. Seoul’s latest deal with the EU will not only bring economic benefits to both sides but also prevent protectionism from rearing its ugly head.

Through its expansion of free trade, Korea became the world’s 15th-largest economy last year and the world’s seventh-largest exporter in the first half of this year. “Open trade with low trade barriers” based on free trade agreements boosts national interests. Korea’s economy turned around faster than those of advanced countries after the onset of the global financial crisis in 2008, but lags behind the emerging economies of China, India and Brazil, whose annual growth ranges from seven to 10 percent. So Korea needs to expand trade and mutual investment with the U.S. and the EU by making the most of free trade agreements.

China accounted for 25.8 percent of Korea’s trade last year, far higher than the share of the EU (18.3 percent), Japan (13 percent) and the U.S. (12.2 percent). Increasing dependence on China is undesirable for the Korean economy, so Korea must step up efforts to conclude free trade deals with the Middle East, Turkey and Canada. For their part, Korean businesses should maximize the benefits of free trade by preparing for designation as certified exporters.

Korea and the U.S. signed a free trade agreement in June 2007, but the deal remains stuck in parliamentary limbo. Seoul and Washington must expedite the ratification process to avoid missing the economic and non-economic opportunities the deal will bring. With the global economic landscape rapidly changing in the 21st century, an open mindset will bring about an edge in the world economy for a person or a country.