Koreas free trade policy poses no threat to the
multilateral trade agenda, the countrys finance minister
Kwon Okyu said yesterday, as concerns grow over the
proliferation of bilateral trade agreements in Asia.
In an interview with Emerging Markets, Kwon said that
Koreas April 2 free trade agreement (FTA) with the US
will serve not only as a profound economic boost to the Asian
nation but should also pave the way for similar pacts.
The main block on the [Doha multileral trade talks] is
not the FTA, Kwon said. We need more
The ADBs regional integration chief Jong-Wha Lee
meanwhile pointed out that the surge in bilateral deals
threatens to undermine multilateral free trade. If there
are so many overlapping FTAs it can create different rules of
origin and complicated distinctions between outsiders that
cannot help to promote free trade in this area, Lee said
The US deal is crucial for Korea, whose economy as a result
will receive a boost equivalent to 6% of GDP over the next
decade, Kwon said. A successful conclusion of the deal
which has yet to be ratified will give Korea increased
leverage when they start negotiating with other major economies
such as the European Union and China.
Kwon said there will be no change to the pact prior to
ratification. At least for Korea, the ratification could
and should be done.
The minister also expects the deal to be approved by the
U.S. before the fast track authority of the US president
expires on July 1. The US government and even the
Democrat-dominated [Congress] are eager to pursue free trade.
What we sense is their approval rate [for the deal] is
increasing, Kwon said.
Kwon hinted that Korea would be willing to resume a
bilateral trade deal with Japan if concerns over key products
including agriculture are sufficiently addressed. The
main obstacle is the Japanese agricultural sector, Kwon
The Japanese government is particularly keen to restart
negotiations with Korea, which have been suspended since the
two sides failed to agree on lifting tariffs on key products.
But Kwon said that a bilateral trade deal between the two
countries could form the basis for deeper Asian integration
resembling the European model.
Pressure to move towards an agreement with Japan is
mounting, especially given Koreas burgeoning trade
deficit with its neighbour. The $25 billion [trade]
deficit with Japan is too big, Kwon said. Without
an FTA trade will Japan will just increase the
Kwon said that Korea will now turn its attention to
concluding other trade deals, principally with the EU and
China. We are taking a multilateral approach to free
trade after the successful negotiation with the US, he
said. Kwon said that although the timetable for a deal with
China is not yet set, we can move forward with the
FTA once ongoing private sector research is wrapped