[EDITORIALS]For free trade with JapanAt the recent Roh-Koizumi meeting, the leaders agreed to resume negotiations on a free trade agreement and promised to accelerate the progress. Taking account of the industrial structures and the levels of technology in the two countries, Korea will suffer some losses for a while after lifting tariff and trade barriers. But in the long term, the free trade agreement will benefit both countries.
Forming economic blocs is a global trend. The European Union is virtually a single unity; South East Asian countries have the Association of South East Asian Nations. The American continent also has an economic bloc with the North American Free Trade Agreement at the center.
By contrast, Korea does not belong to an economic bloc and has not completed a free trade agreement. The agreement between Korea and Chile, the only such attempt, is still sleeping in the National Assembly. The investment agreement with the United States has made no progress because of Korean quotas on movies.
Korea must make a leap in the global market by opening our economy, cooperating with the world and improving our competitiveness. We believe that a Korea-Japan free trade agreement must be promoted with reform in mind. That will help in negotiating a free trade agreement with China.
Thorough strategic preparations to minimize the impact on domestic industry and maximize economic benefits are needed. The automobile and electronic component industries will suffer losses when Korea is open to Japan. The unfavorable trade balance with Japan may grow even bigger. To give domestic firms enough time to prepare, Seoul should try to lengthen the tariff phase-out period while encouraging technology development. To help Korean products enter Japan, non-tariff barriers must be lifted and a pledge of technology transfer and investment should be made.
Korea has the world’s 11th-largest trade volume, and exports account for 67 percent of the nation’s gross national product. With such an export-led economy, opening our market is inevitable. The clue can be found in Japan.