Korea aims to expand FTA network with emerging countries

Industry

Korea aims to expand FTA network with emerging countries

Published: 22 Aug. 2024, 17:02 Updated: 23 Aug. 2024, 14:46

JIN EUN-SOO
jin.eunsoo@joongang.co.kr

Korea's Trade Minister Jeong In-kyo speaks during a briefing on the trade policy roadmap at the ministry in Sejong on Thursday. [NEWS1]

Korea laid out updated trade goals to enhance resilience against protectionism amid growing geopolitical conflicts and the outcome of the upcoming U.S. presidential election.

The country's Ministry of Trade, Industry and Energy announced Thursday that it will expand its current Free Trade Agreement (FTA) partners which include the Economic Partnership Agreements to 76 countries that account for 90 percent of the global GDP, up from the current 85 percent. That will topple Singapore from the top spot of FTA networks, with its partners accounting for 87 percent of the global GDP.

Korea will spearhead agreements with emerging countries in the Arab, Asian, Eurasian, African and Latin American regions considered to have future growth potential.

The country is also vying to establish a trade belt in Southwest Asia, rich in resources, by expediting the negotiation process with countries like Mongolia, Pakistan and Bangladesh.

Cooperation with the so-called Global South consisting of developing countries in Asia, Africa and Latin America will be one of priorities of the renewed trade objectives.

The Global South, representing 62.8 percent of the global population and 20.4 percent of the GDP, has seen its presence grow significantly in recent years due to its accelerating economic development and strategic value amid global polarization.

Pioneering new export destinations in the region, Korea will ramp up trade insurance supply from 76 trillion won ($56.8 billion) in 2023 to 90 trillion won by 2027. Mutually agreed-upon items will expand from 186 in 2023 to 230 by 2027 for trade with the countries in question.

Partnerships with the Global South will focus on securing mineral resources abundant in those countries, establishing local supply chains in such countries as Chile, Kazakhstan and Tanzania for lithium and graphite.

Fostering local talent will also take place, starting with Asean countries such as Indonesia and Vietnam, where Korean companies' presence is significant and has the necessary infrastructure.

The new road map includes the resumption of talks on a trilateral FTA between Korea, Japan and China, which have been suspended since 2019. The ministry said the pending issue of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will focus on forming a social consensus as the idea received much criticism from the country's agricultural industry.

Regarding existing trade agreements with four key partners — the United States, Japan, China and the European Union — Korea will work to fortify its strategic partnership.

It will work closely with the United States in areas of advanced technology research such as semiconductors. In the case of a supply chain disruption, Korea will collectively respond with Washington and Tokyo by setting up an early warning system.

Although the road map will most likely be revised depending on the result of the U.S. presidential election in November, the Trade Ministry said it could not delay any longer as it had initially intended to announce the plan in May.

"This road map focuses on how to stably maintain Korea-U.S. trade relations and how to reach out by becoming one team with Korean companies regardless of the result of the November election," said an official from the Trade Ministry.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]