Deputy Minister for Trade Woo Tae-hee.(Photo:MOTIE)

Korea recently signed an FTA with China, capping the nation’s scheme to establish an FTA network covering the world’s top three economic spheres — the United States, EU and China. 

The nation saw the portion of trade with FTA signatories surge from 15.7 percent in 2010 to 41.1 percent in 2014. Trade and export growth with FTA countries has surpassed its overall trade and export growth rates. 

The following are excerpts of an interview between NewsWorld and Deputy Minister for Trade Woo Tae-hee in which he spoke of Korea’s FTA strategies and other trade policies. 

Question: Will you tell our readers about the current status of foreign countries with which Korea has signed FTAs? What changes in trends do you see?

Answer: Korea has currently concluded 15 FTAs with 52 countries. Out of the total, 11 FTAs with 49 countries are in force. The nation has established an FTA network by signing up an FTA with each of the world’s top three economic spheres — the United States, EU and China — in a short period of time. Korea is the sole country among the global top 10 trade powerhouses to conclude FTAs with the top three economic powers. 

Korea saw the portion of its trade with FTA signatories surge from 15.7 percent in 2010 to 41.1 percent in 2014. The nation has turned out to see trade and export growth rates with countries with FTAs in force surpass its overall trade and export growth rates. In particular, Korea’s overall trade grew 2.4 percent in 2014, but trade with FTA signatories surged 7.1 percent. Trade with non-FTA signatories actually declined 0.6 percent, indicating the fact that FTAs play a great part in exports.

The effectuation of FTAs has also the effect of enhancing price competitiveness of Korean-made products, exploring new markets, creating trade and trade diversion, diversifying trading items with FTA signatories and improving profits of exporting companies by saving costs through the easing of tariff barriers. 

Q: Will you comment on the current countries with which Korea seeks to conclude FTA deals?

A: Negotiations are under way for concluding an FTA among Korea, China and Japan as well as the Regional Comprehensive Economic Partnership (RCEP). The RCEP is a Free Trade Agreement between ASEAN nations and ASEAN’s FTA partners. In late April, the Korean government announced plans to launch negotiations on the singing of FTAs with six Central and South American countries — El Salvador, Guatemala, Nicaragua, Honduras, Costa Rica, and Panama — and an FTA with Ecuador.  

Bills to approve the effectuation of FTAs with China, New Zealand and Vietnam have been recently submitted to the National Assembly for ratification. We’ll endeavor to have the FTAs ratified at the possible earliest date so that the general consumers can enjoy benefits from the lowering of tariffs barriers. 

Q:  Will you elaborate on the significance of the FTA Korea has recently formally signed with China?

A: The signing of the Korea-China FTA in Seoul on June 1 came three years after the two countries launched their first round of negotiations in May 2012. 

Korea has become the first nation among the global top 10 trading countries to establish an FTA network with the global top three economic spheres, rising to a full-fledged FTA hub state, and it is expected to serve as a good opportunity for Korea to play a leading role in boosting economic cooperation the Asia-Pacific region in the years to come. 

The Korea-China FTA will have an effect of eliminating tariff/non-tariff barriers for Korea, which will lead to improving an approach to China’s domestic market to put the nation in a more advantageous position than its rivals. In particular, we’ve created a foundation to protect Korean companies with a focus on eliminating China’s diverse non-tariff barriers and difficulties they have been experiencing as painful things. 

Korea has secured concessions from China’s promising service markets, including construction and entertainment, and the strengthening of standards in the financing and telecommunication fields is expected to help Korean companies gain more opportunities to enter the Chinese market. 

Finally, the Korea-China FTA will contribute greatly to building an investment process in which foreign investors secure investment platforms in Korea before advancing to their final investment destination,China. 

Q: What strategies does the government have to boost trade with developing countries?

A: The government strives to establish new frames in terms of cooperative bodies, areas and types by aggressively accelerating trading cooperation with emerging countries in consideration of the characteristics of each economic sphere. In this regard, we seek to help SMEs and mid-size superstars as well as youth expertise expand their inroads into foreign countries, to diversify cooperation in new industries and value-added fields, and to promote joint projects and joint entries into third countries. 

In the Middle East, Korea strives to make joint entries into third countries with Saudi Arabia and the United Arab Emirates, to provide support for attracting foreign investments, including state investment funds, to expand collaboration in new energy industries, including nuclear power and smart grids, while seeking to win mega-projects in conjunction with such extravagant events as 2020 Qatar FIFA World Cup and 2020 Dubai Expo. The government plans to set up a center to provide comprehensive support in landing jobs overseas and hold job fairs in foreign countries to help prominent manpower advance to foreign countries.   

In Central and South America, the Korean government plans to help Korean companies advance to e-commerce markets, expand e-trade cooperation, establish partnerships in such value-added sectors as new energy industries, health/medical care and IT, expedite inroads into defense industries, and provide support for landing such infrastructure projects as water resources and plant engineering. We’ll accelerate Korea’s efforts to advance into Central and South America as the Korea-Colombia FTA is to go into effect, and Korea and Central and South America are to launch FTA negotiations. 

In Central Asia, Korea seeks to land mega-projects by making the most of the cooperative momentum created during President Park Geun-hye’s visit to Turkmenistan and Uzbekistan in April and May, respectively, while trying to promote cooperation in such areas as photovoltaic power, textiles and root industries, and expand market exploration. 

In Southeast Asia and India, Korean high-level economic cooperation channels will be activated to expand market exploration in such promising areas as nuclear power, agricultural machinery and power infrastructure in major cooperation target countries, including Indonesia, Vietnam and the Philippines. We strive to create an environment for expanding trade by upgrading Korea-ASEAN FTA and Korea-India CEPA. 

Q: Advanced, developing and undeveloped countries are scrambling to boost trade on their different situations. What strategies does the government have to implement to expand exports?

A: Of late, Korea has seen its export performances decline due to the effects of such external uncertainties as global slowdown, low crude prices and a low yen. To overcome the setbacks, the government is fully translating into action short-term steps that were announced on April 15 to boost exports.

Korea strives to expand market entry into China by cashing in on e-commerce transactions and local distribution networks, while planning to explore new promising export items to China, provide information, and hold trade negotiations in connection with local distribution networks. 

The government continues to dispatch economic delegations and hold export consulting sessions in such areas as the booming U.S. market, ASEAN (with hallyu all the rage), new FTA signatories such as Australia and Canada, Middle Eastern and Central and South American countries in which President Park visited and held summit talks, and other promising export destinations. In addition, we will provide such full support to SMEs and mid-size exporters as responses to non-tariff barriers, the pushing domestic companies to be exporters and expanding trade finance support. 

In June, the government plans to come up with steps to ramp up each field’s export competitiveness after looking at trade environment changes and the current state of each industry’s competitive edge.