Korea-Peru deal serves as another opportunity
Korea has added one more country to the list of free trade partners. On Monday, the nation struck a free trade agreement (FTA) with Peru. The pact is expected to help Asia’s fourth-largest economy strengthen its foothold in South America. It is also likely to further boost Seoul’s efforts to expand its global FTA network.
First of all, the deal will have a positive effect on Korea’s FTA talks with Colombia, Mexico and other nations in the region. It will also facilitate negotiations with South America’s Mercosur trade bloc. (Mercosur is the Southern Common Market. Its full members are Argentina, Brazil, Paraguay, Uruguay and Venezuela. Its associate members are Bolivia, Chile, Colombia, Ecuador and Peru.)
Peru has become the second South American country to sign an FTA with Korea, following a similar pact with Chile in 2003. No doubt the accord will be mutually beneficial. Korea and Peru have agreed to remove all tariffs within 10 years after the agreement takes effect. Korean automakers and electronics manufacturers will be the main beneficiaries of the free trade deal. Peru will also sell more natural resources and agricultural and marine products to its Asian trading partner.
The deal also calls the attention of Korean firms to mineral-rich Peru, home to the world’s second-largest deposits of copper. Its reserves of zinc and tin are the third biggest in the globe. The trade between the two countries was estimated at $1.5 billion last year with Korea’s exports to Peru amounting to $641 million. Peru’s exports to Korea stood at $900 million, of which $850 million was for shipments of zinc, copper and other minerals.
It goes without saying that the Seoul government and local businesses need to become more aggressive in their efforts to secure more stable sources of minerals and energy from Peru and other Latin American states. We hope the deal will provide added momentum for Korea to step up its ``resources diplomacy.”
As anti-globalization activists point out, free trade agreements cannot be a one-size-fits-all solution. A certain group of people such as farmers might fall prey to free trade. However, expanding the FTA networks is inevitable for the export-oriented nation. Side effects of free trade must be overcome by taking measures to support those who may suffer due to an opening-up of the market.
Also on Korea’s free trade partners list are India, Singapore, the Association of Southeast Asian Nations (ASEAN) and the European Free Trade Association (EFTA). The nation already concluded an FTA with the European Union and is set to sign the deal soon. Korea is also considering similar agreements with Japan and China.
Now, we urge the U.S. government to make more efforts to persuade Congress to press forward an FTA with Korea that was signed in 2007. The ratification should no longer be delayed because it would hamper international efforts to promote free trade.
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