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South Korea, Southeast Asia sign framework agreement on FTA
(AP)
Updated: 2005-12-13 14:47
South Korea and Southeast Asia signed an accord Tuesday that calls for
completing negotiations by the end of 2006 on freeing up trade, though a major
hurdle remains over a rice import dispute with Thailand.
The framework agreement sets out basic principles and targets with the
ultimate goal of creating a market of 548 million people with a combined economy
of more than US$1.4 trillion (euro1.2 trillion).
South Korean President Roh Moo-hyun and his counterparts from the 10-member
Association of Southeast Asian Nations inked the accord after their annual
meeting in Malaysia's main city, Kuala Lumpur.
"It is good," Roh said before entering the signing ceremony.
An overall free trade deal also involves four other pacts _ dealing with
goods, services, investment and dispute settlement. While there is little
problem with the last three accords, a rice dispute has complicated the pact on
trade in goods.
The goods pact was signed last week by Seoul and nine of ASEAN's 10 members
after Thailand, the world's top rice exporter, decided to stay out of it,
objecting to South Korea's insistence on excluding rice from the accord.
Seoul, which faces an often-militant farm lobby at home, keeps its doors shut
to foreign rice through high tariffs and subsidies for small-plot farmers.
Both sides, however, expressed optimism about finding a compromise. South
Korean officials said the goods accord will be complete by April while Thailand
officials forecast "three or six months" before joining that pact.
Despite the rice row, Thailand joined other ASEAN members in signing
Tuesday's framework accord as well as the dispute settlement pact with South
Korea.
The two sides plan to launch talks to finalize the two other accords _ trade
in services and investment _ next year. South Korean officials said the two
pacts would be much easier than the goods accord.
The goods agreement calls for eliminating tariffs on all agreed products by
January 1, 2010, although the six developed members of ASEAN will have
flexibility to remove tariffs on 5 percent of products by 2012.
The remaining three, poorer ASEAN members were given a later but unspecified
deadline.
ASEAN-Korea trade last year amounted to US$40.2 billion (euro33.9 billion),
up nearly 25 percent from 2003.
Despite strong pressure from rice farmers, the South Korean government has
taken steps to lower import barriers. It concluded an accord with nine rice
exporting countries including the United States and China to increase mandatory
rice imports from 4 percent of domestic consumption to 8 percent by 2014. The
accord calls for fully opening the market thereafter.
Farmers in South Korea claim that they are already heavily indebted and that
their plight would worsen if cheaper foreign rice floods into the
country.
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