South Korea Seals EU FTA, Eyes Other Countries

Top Quote South Korea and the EU have ratified a free trade agreement that will take effect on July 1st. Provideo Financial analysts perceive South Korea as growing powerhouse for international trade. End Quote
  • (1888PressRelease) May 17, 2011 - Provideo Financial believes that South Korea is becoming a key country for international trade. With efforts towards enacting free trade agreements, developing renewable energy and preparations to reunite with North Korea, South Korea has proving itself to be open to the benefits and opportunities provided by expansion.

    German Chancellor Angela Merkel and South Korean President Lee Myung-bak discussed ways to strengthen economic ties, especially for the development of renewable energy, during their talks in Berlin on Monday. The South Korean president is making a tri-nation tour of Europe this week. On May 4, South Korea's government ratified a free trade agreement with the EU in a lengthy and difficult process. The FTA will tentatively take effect on July 1, and is expected provide a momentum in promoting bilateral trade and investment between their countries. Lee and Merkel agreed to strengthen ties in future-oriented areas such as renewable energy development and low-carbon, green growth. They also agreed to keep up with ongoing efforts to share Germany's experience in reunifying the East and West to help South Korea better prepare for reuniting with the North. Under the memorandum of understanding, Seoul will receive a massive database from Berlin on the 1990 reunification of East and West Germany.

    The EU is the South Korea's second largest export destination after China, with Korea having recorded a trade surplus of $14.8 billion in dealing with the EU last year. The FTA is also expected to help ease inflationary pressure in South Korea by lowering import prices of agricultural and fishery products and other food materials. Lowered tariff barriers will contribute to a boost in South Korea's manufacture exports. A report by the South Korean foreign ministry also predicts cheaper meat, cheese, oranges, grapes and other agricultural and fishery products to the domestic market, helping stabilize prices of those goods that have been playing a major role in exerting upward pressure on inflation. It also estimates the deal to generate 230,000 jobs in the long run.

    South Korea is also pushing for FTAs with other nations. Talks at the director-general level on a bilateral free trade agreement with Japan were held on Monday in Seoul. Officials from the two countries discussed non-tariff barriers and other trade-related issues, and plans for establishing an environment suitable for reopening the FTA negotiations which had halted in 2003. Another free trade agreement was signed with the USA in 2007 but it awaits congressional approval from both countries. Malaysia is also considering a specific agreement with South Korea, which also established an FTA with ASEAN in 2006.

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