Free trade deal with ASEAN: its completion (코리아헤럴드 2009.06.01)

Free trade deal with ASEAN: its completion and a new start

By Kim Jong-hoon/Ministerfor Trade

To many young Koreans, Southeast Asia is an exotic travel destination with beautiful landscapes and rich cultural heritage. The region means, however, much more than a tourist spot for Koreans.

ASEAN is emerging as a significant economic player in Asia with its large population of 580 million people and gross domestic product of $1.3 trillion. ASEAN is an important partner for Korea in trade and world affairs. In 2008, the regional economic bloc became Korea's third-largest trading partner and second-largest investment destination.

In celebration of the 20th anniversary of the Korea-ASEAN Dialogue Partnership, the Korea-ASEAN Commemorative Summit will be held on June 1 to 2 on the island of Jeju. This historic summit will provide fresh momentum to strengthening the bilateral relationship in the future.

Moreover, it will further develop the Korean government's "New Asia Initiative" through which Korea aims, inter alia, to build free trade networks with major Asia-Pacific countries and establish a sound basis for further promoting trade and investment in the region.

For the last few decades, international trade has been the major engine for Korea's rapid economic development. In this process, bilateral and regional free trade agreements have become a strong legal framework for cross-border trade in goods and services with other countries in recent years.

With the close economic relations and a complementary industrial structure as a backdrop, Korea and 10 member states of ASEAN launched negotiations for a free trade agreement in November 2004 with a view to creating the "Korea-ASEAN Free Trade Area."

Since then, the Agreement on Trade in Goods and the Agreement on Trade in Services have taken effect while the Agreement on Investment, the last pillar of the Korea-ASEAN FTA, remains to be signed.

As an outcome of intense negotiations for about three years, the signing ceremony of the Investment Agreement will finally take place on June 2 on the occasion of the Summit in Jeju.

The signing will mark the completion of the 5-year-long Korea-ASEAN Free Trade Agreement negotiations. The Agreement will also contribute to further expanding investment between Korea and ASEAN member states through progressive liberalization of the investment regime and enhanced protection of investment.

It is encouraging that since the Agreement on Trade in Goods took effect, trade flows between the two sides have been rapidly rising. This is exemplified by a 26 percent increase to total $90.2 billion in two-way trade volume between Korea and ASEAN member states in 2008, the first full year since the accord became effective in 2007.

I believe the Investment Agreement will amplify the positive effects of the increased trade by ensuring stronger safeguards for each other's investors.

In addition, Korea and the 10 ASEAN member states are set to further liberalize trade in goods starting in 2012, and review the necessity of additional liberalization in services and investment in accordance with the Korea-ASEAN FTA. Through this process, the business environment for traders and investors will continue to improve in both Korea and ASEAN.

Intra-trade among EU member states accounts for about 70 percent of the total trade volume of the European Union, while trade volume within the North America Free Trade Agreement, which covers the United States, Canada and Mexico, makes up 45 percent of the area's total trade volume. In comparison, intra-trade among Korea, China, Japan and the ASEAN member states accounts for only 38 percent of their total trade volume. This illustrates the great potential for further growth in trade and investment among East Asian countries.

I sincerely hope that the upcoming Korea-ASEAN Commemorative Summit in Jeju will be an important step toward advancing trade, investment and cooperation in various fields between Korea and the ASEAN countries to a higher level.

출처 : 2009/6/1 The Korea Herald