[VIEWPOINT]Ratify the Chile free-trade pactA year has passed since the conclusion of the Korea-Chile Free Trade Agreement, Korea’s first FTA negotiations. Having led the negotiations for Korea and worked for the treaty’s ratification, I have the feeling that our society has been paying too high a price for too long, although I expected that some controversies and “of lesson costs” would be inevitable.
Controversies over the Korea-Chile Free Trade Agreement can be largely understood as concerns over the damage that the FTA might cause to Korean farmers rather than over the agreement itself, considering that our contracting partner is misunderstood to be one of the world’s major agricultural producers. In this regard, the gist of discussions will be whether Chile is the right partner for our first FTA negotiation; how much damage there will be to our farmers when the FTA comes into effect and how well the government has prepared complementary measures.
First, based on open economic policy and stable politics, Chile is one of the most attractive FTA partners in Latin America. The fact that Chile has entered agreements with 32 countries, including the United States, the Europe Union, members of the European Free Trade Agreement, Mexico, Singapore, and New Zealand, proves this point. This also means that if a country cannot make an FTA with Chile, its trade interests will be greatly hurt.
Second, damage to our domestic agriculture is estimated to be very limited. Unlike the image of Chile as a major agricultural producer, its agricultural products account for a mere 0.6 to 0.7 percent of the world market and 62 percent of its agricultural exports are apples, pears and grapes. Considering this export structure, the two countries agreed to treat apples, pears, and grapes in high-demand season, as well as rice, as “exceptions to liberalization.” Both sides agreed to reserve 373 items, including garlic, onions, red peppers and dairy products, as exceptions and to discuss the matter after an agreement on the Doha Development Agenda is reached. These negotiations show that the Korea-Chile Free Trade Agreement would never endanger our food security or destroy Korean agriculture.
Based on the results of the final FTA negotiations, academic analysts have estimated that the damage to agriculture here, including indirect damage, would be at an annual average of 40 billion won ($34 million) to 60 billion won.
Third, as a complementary measure to the predicted damage, the National Assembly proposed an “FTA Assistance Special Act.” And on the premise that the act became effective, the government made plans to establish a special assistance fund and has already allotted 100 billion won as contributions to the fund in the next year’s budget.
The government also has almost finished enacting and revising three major agriculture-related laws, such as extension of special taxes to benefit rural areas, debt reduction for farmers and fishermen and welfare support for farming and fishing villages and is preparing other comprehensive measures for agriculture and farming villages.
As can be seen by these efforts, the government has a stronger will to solve the problem of farming and fishing areas than ever.
Some argue that, granting the inevitability of the FTA, its ratification should be postponed until after next year’s legislative election or even after this round of world trade negotiations ends. But in a situation where sufficient measures have been prepared and delayed ratification only leads to further damage, there are no particular reasons to put off ratification.
Concerned about a possible drop in the market share of our major products in Chile, including automobiles, cellular phones, and color televisions and loss of credibility overseas, the business community is appealing for the early ratification of the pact. If the controversy over the ratification continues for a long time, it would only aggravate uncertainty about our economy.
We understand fully the difficult reality of rural areas, but farmers should also look at the facts. A vague sense of refusal of the FTA is of no help. Instead, they should cooperate with the government so that the ongoing assistance measures can help a rural recovery. Whether they are because of arguments from farmers or measures by the government, bucking international trends will ultimately burden our economy.
The Korea-Chile FTA is not an agenda of a certain administration, industry or company, but a national one. A year after the conclusion of the FTA, enough discussion has been heard and rational measures have been prepared. Now we need to make a wise decision to ratify the FTA for the entire national economy and for the future of our descendants.
* The writer is minister for trade. Translation by the JoongAng Daily staff.
by Hwang Doo-yun