[Letters] Regional economic integration
A Comprehensive Economic Partnership Agreement has been signed by the trade representatives of India and South Korea. Although a CEPA is weaker than a free trade agreement, the bilateral agreement between India and South Korea is expected to provide vast economic benefits, along with various non-economic advantages.
South Korea currently has several FTAs in effect with countries such as Chile and Singapore.
There are also several more under negotiation, including for Canada, Mexico, Australia, New Zealand and Peru.
Negotiation on the Korea-European Union FTA is de facto complete and the agreement is almost ready to be signed by both parties’ trade representatives.
An FTA between the United States and South Korea was signed two years ago and it’s still waiting to be ratified by both nations’ legislatures.
Ratifying and effectuating this treaty is vital as it will provide South Korea with unprecedented opportunities, economic and non-economic.
Economically, Korea’s exports to the United States will significantly rise, especially in manufacturing and automobiles. Domestic employment and foreign direct investment will also steadily increase, along with enhanced consumer welfare through the decreased price of products.
This bilateral agreement will have a ripple effect, spreading throughout various sectors. Politically, Korea’s stance in international society will be enhanced and the alliance between Korea and the U.S. will grow stronger.
Many Koreans still disagree with this treaty, claiming that it will make the Korean agriculture industry collapse. However, if we look at the earlier FTA between Chile and Korea, Chile was a major exporter of agricultural goods but did not cause significant damage to Korean agriculture.
In addition, rice was an exception during the negotiations and the Korean government is coming up with countermeasures to deal with the negative impacts that can arise from the Korea-U.S. FTA.
Some also worry that because the bill contains language regarding the elimination of the screen quota, a protective measure aimed at defending and fostering the Korean movie industry.
However, according to 2005 statistics by the Korean Film Council, preference for Korean movies remains very high at 64 percent, while American films are at 23 percent. Also, the market share for Korean films has been increasing despite reductions in the screen quota in the past.
President Obama, once against this bill, has recently had a positive attitude toward the Korea-U.S. FTA. Although some inevitable negative impact is expected, in the long run, the treaty will definitely aid South Korea in developing into a more advanced nation than it is now.
The Lee Myung-bak administration should continue to pursue more regional integration with other countries for more economic and non-economic benefits.
Gyeonggi Academy of Foreign Languages