| Gov't Pushes FTA Talks With Japan Amid Resistance|
Korea Times Aug 23 2004
By Seo Jee-yeon
Despite growing demands for a delay in the schedule for a Korea-Japan FTA (free trade agreement) from Korean business circles, Seoul’s delegation on Monday launched the fifth round of Korea-Japan talks with its Japanese counterpart as scheduled for a three-day run in Kyongju, North Kyongsang Province.
The fifth round of talks are aimed at creating a consolidated text based on the results of talks in seven divisions in past rounds, including the trade of goods, investments and services, non-tariff measures, mutual recognition and conflict resolution, the Ministry of Foreign Affairs and Trade said in a statement.
If the talks, which has been held every two months, continue as planned, both governments will start negotiating the details of tariff cuts by sector from this fall, aiming for a final agreement by the end of next year.
With the Korea-Japan FTA taking shape, concerns of local businesses over the effects of the trade pact are growing, particularly in areas that are less competitive than their Japanese counterparts such as automobiles and electronics.
The Federation of Korean Industries (FKI), a big business lobbying group, said it supports the creation of FTAs with trading partners but opposes a rush toward the establishment of a Korea-Japan FTA, as it will strike a major blow to local industries, many of which overlap with Japanese firms.
In a recent business seminar, FKI executive vice chairman Hyun Myung-kwan even said Samsung, the largest South Korean conglomerate, opposes the finalization of an FTA with Japan by the end of next year.
However, the government made it clear that it will push ahead with talks with Japan for the nation’s second FTA after Chile.
``It is true that some Korean industries are less competitive than corresponding sectors in Japan, so the zero-tariffs on Japanese imports could worsen chronic trade deficits with Japan. However, in the long term, Korea could benefit from the trade pact with Japan through technology transfers, which might sharpen the competitive edge of industries in the expected fierce competition with China,’’ newly appointed Trade Minister Kim Hyun-jong said in a recent interview with a local business daily.
``The creation of an FTA with Japan is also important for laying the foundation for an era of economic cooperation in the Northeast Asian region.’’
He also added some areas like fishery, petrochemicals and textiles could benefit from an FTA with Japan.
In addition, the Korean government also expects it will be able to tap such promising Japanese sectors as government procurement and construction.
Regarding non-tariff barriers in Japan, one of the biggest challenges facing the push for a Korea-Japan FTA, Kim said in the talks the Korean delegation will seek to set up a committee to make a legally binding decision within six months concerning a controversial issue involving non-tariff barriers if the issue is raised.