Korea and Chile agree to update 2003 FTA

Students greet Chile’s President Michelle Bachelet and President Lee Myung-bak during a welcoming ceremony yesterday at the Blue House in Seoul. By Cho Mun-gyu

Korea and Chile have agreed to freshen up their five-year-old free trade agreement, the Blue House said yesterday.

President Lee Myung-bak and President Michelle Bachelet of Chile discussed bilateral cooperation and global issues at a summit in Seoul yesterday morning. Updating the bilateral trade deal was one of the key issues.

The deal that the two countries signed in 2003 went into effect the following year.

“Five years have passed since the Korea-Chile FTA took effect, and the two leaders have agreed to cooperate to further develop the FTA to benefit both countries by reflecting changes in the situation,” the Blue House said. “President Lee also requested President Bachelet’s support for Korean companies seeking to expand participation in energy, resource and infrastructure development in Chile.”

President Lee was also reported to have said that although Korea and Chile are located far from each other, they have developed a very close relationship.

The two countries tied the diplomatic knot in 1962, and the relationship became stronger after the free trade deal went into action in 2004. Chile was Korea’s first FTA partner, and over the past five years, bilateral trade grew from $1.85 billion in 2003 to $7.16 billion in 2008, according to the Blue House.

On the sidelines of the summit yesterday, business leaders from both Korea and Chile attended the 17th Joint Meeting of the Korea-Chile/Chile-Korea Economic Cooperation Committees.

The meeting was organized by the Korea Chamber of Commerce and Industry in honor of the Chilean president, who arrived here Tuesday en route to Singapore for the Asia-Pacific Economic Cooperation summit this weekend, a regional leaders’ conference that the Korean president will also attend.

In his congratulatory remarks, KCCI Chairman Sohn Kyung-shik said the Korea-Chile FTA is “the most successful one so far” and called for a higher stage in the development of relations.

“The FTA has allowed consumers to purchase a variety of good-quality products at a reasonable price,” Sohn said during a luncheon at a hotel in central Seoul that followed the joint business meeting.

“It’s what the two countries are benefitting from through free trade spurred by globalization and liberalization. Having the successful trade expansion as a launch pad, both countries should work to diversify their ties in wider sectors,” he added.

Lee Kyung-tae, president of the Korea International Trade Association’s Institute for International Trade, said in his review of the past five years that “we [Korea and Chile] need to see more investment by both sides and a wider range of cooperation between our countries in the future.”

Future areas of cooperation could be information technology, energy resources, construction and industrial technology sectors, Lee said.

Nevertheless, “Chile, which has an FTA network with most Latin American countries, provides a base for Korea’s trade and investment in Latin America,” he said.

Meanwhile, Chilean President Bachelet urged more Korean businesses to invest in Chile.

“The ratification of the Korea and Chile free trade agreement has brought positive economic changes to both countries, but there is still long way to go,” she said.

Bachelet pointed out that many Korean products can be bought in Chile, but the reverse is not the case.

By Ser Myo-ja, Lee Eun-joo [myoja@joongang.co.kr]