S. Korea ac­cel­er­at­ing move to ex­pand FTA ter­ri­tory

The Korea Times - - NATIONAL -

For South Korea, an open and small econ­omy, sell­ing goods over­seas may be the most vi­able source of in­come, and that’s why the coun­try is ratch­et­ing up ef­forts to ex­pand or up­grade free trade agree­ments with more and more coun­tries amid grow­ing trade pro­tec­tion­ism.

This year alone, Asia’s fourth-largest econ­omy has inked or im­ple­mented three new free trade agree­ments (FTAs), with seven more trade talks cur­rently un­der­way.

Seoul’s move to seal more FTAs has gath­ered pace since last year as its top two trad­ing part­ners — the United States and China — have been en­gaged in an un­prece­dented trade war. Their pro­tracted trade row has dealt a hard blow to South Korea, leav­ing it suf­fer­ing an ex­tended slump in its out­bound ship­ments.

In September, South Korea’s ex­ports sank 11.7 per­cent from a year ear­lier, ex­tend­ing their slump to a whop­ping 10th con­sec­u­tive month. It marked the long­est year-on-year skid of ex­ports since the 19-month con­sec­u­tive fall from Jan­uary 2015 to July 2016.

Adding to the woes is the re­cently flared-up trade tus­sle be­tween Seoul and Tokyo. The Asian neigh­bor’s abrupt curbs on ex­port­ing key in­dus­trial ma­te­ri­als, cru­cial for the pro­duc­tion of chips and dis­plays, served as a wake-up call for South Korea to fur­ther di­ver­sify its ex­ports.

“It is unusual for coun­tries such as South Korea to heav­ily de­pend on a few part­ners in trade,” Kim Bongchul, a pro­fes­sor of com­merce at Hankuk Univer­sity of For­eign Stud­ies, said. “Even with­out such trade dis­putes, South Korea al­ways needed to avoid putting all its eggs in one bas­ket.”

Since its de­but in 2017, the Moon Jae-in ad­min­is­tra­tion has been preach­ing the ex­pan­sion of FTA ter­ri­tory and the di­ver­si­fi­ca­tion of over­seas mar­kets by forg­ing or strength­en­ing eco­nomic and po­lit­i­cal ties with emerg­ing coun­tries from the South­east and the Cen­tral Asian re­gions, as well as with Rus­sia and In­dia, un­der its iconic New South­ern and North­ern poli­cies.

“An FTA can work as a tool for South Korea in main­tain­ing over­all bal­ance in trade. It serves as le­gal in­fra­struc­ture that helps the coun­try to ease its de­pen­dence on tra­di­tional part­ners,” Kim added, claim­ing South Korea is on the right path to ex­pand ties with more part­ners.

Start­ing this month, South Korea’s FTA with Hon­duras and Nicaragua went into ef­fect, as the first step of its com­pre­hen­sive trade pact with five Cen­tral Amer­i­can coun­tries. The FTA with the re­main­ing coun­tries — Costa Rica, El Sal­vador and Panama — will also go into ef­fect af­ter they com­plete re­main­ing pro­ce­dures.

In Au­gust, South Korea struck a free trade deal with Is­rael that is ex­pected to take ef­fect in the first half of 2020.

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