[EDITORIALS]A Free Trade Zone Makes SenseAt a meeting in Brunei of the Association of South East Asian Nations plus Korea, China and Japan, South Korean President Kim Dae-jung proposed Monday the creation of a free trade area in East Asia. Because of Korea's dependence on trade, and the reinforcement of global trade restrictions due to a worldwide economic recession, President Kim's proposal is timely and should be promptly addressed.
Countries around the world have signed free trade agreements on regional or national levels, and as a result have expanded direct and indirect investment and technological and human exchange with each other. But countries in East Asia have lagged behind such advances. Korea is among those countries that have not yet struck free trade agreements with any nation, despite the fact that trade accounts for 87 percent of Korea's gross domestic product.
According to the Korea Institute for International Economic Policy, if a free trade zone is established in East Asia, it will help increase Korea's exports by 30 percent and imports by 25 percent. Meanwhile, a free trade zone will reduce Korea's trade deficit by $880 million. In addition to improving the trade balance, Korea would see a 2.14 percent increase in its gross domestic product.
How can those numbers happen for Korea? In reality, it may be hard to bring ASEAN countries － along with Korea, China and Japan － into a free trade agreement simultaneously. If that proves true, Korea, China and Japan may still be able to make a free trade agreement on their own before accommodating ASEAN countries. Otherwise, ASEAN countries would form a separate free trade zone, as a first step, then accept the three Northeast Asian countries one by one － a second step. It's important for Korea to determine its position and strategy on the issue before it starts negotiations. Korea has tried to form a free trade agreement with Chile for three years, but talks with Chile are on the brink of failure because the two countries can't agree on opening the agricultural market. The opening of the agricultural market will be one of the major issues in free trade negotiations among Northeast Asian countries. If Korea repeats the failures of its negotiation with Chile, President Kim's suggestion will be criticized as diplomatic lip service.