Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
INTERVIEW Chile finds biz opportunities with Korea on flipside of pandemic
Chilean Vice Minister of Trade Rodrigo Yanez Benitez speaks with The Korea Times at the Chilean Embassy in Seoul, Aug. 26. / Korea Times photo by Yi Whan-woo
By Yi Whan-woo
By Yi Whan-woo
Chilean Vice Minister of Trade Rodrigo Yanez Benitez finds growing business opportunities with Korea on the flipside of the COVID-19 that has stricken the world economy.
For instance, limited face-to-face contacts are driving the world into cyberspace and increasing demand for digital technology ― an area in which the leaders of Chile and Korea agreed to bolster cooperation during their 2018 summit.
More consumers worldwide are paying attention to the immune system and turning to superfoods ― key Chilean export items for which Korea has not yet opened its market.
These industry and market trends collectively add to a need for speeding up talks on updating the 16-year-old free trade agreement (FTA) between Chile and Korea, following three rounds of negotiations in November 2018 and last year in July and October.
Vice Minister Yanez flew to Seoul last week to discuss all these issues face-to-face with Korean government officials, entrepreneurs and other relevant parties.
“We have had months of online meetings, but face-to-face meetings are also important given that it provides a chance to meet different stakeholders and players,” he said during an interview with The Korea Times at the Chilean Embassy in Seoul, Aug. 26.
“Resuming economic activity does not mean putting social distancing on the side. We hope to leverage on trade for economic recovery and we find Korea dependable for that purpose.”
Serving his job since July 2019 under the foreign ministry, Yanez is the point man on Chile's trade.
The Korea visit was part of Yanez's first official overseas trip since the coronavirus outbreak. He also visited the United Arab Emirates and Europe.
He views trade as “the driver for the economic recovery” and that Korea, as Chile's fifth-largest trading partner, and Chile, as Korea's first FTA partner, “share almost identical principles in terms of our trade policy.”
Among the people he met in Seoul were Trade Minister Yoo Myung-hee, Deputy Trade Minister for Multilateral and Legal Affairs Kim Seung-ho and Second Vice Foreign Minister Lee Tae-ho as well as executives from KT and other leading companies.
The topics they discussed ranged from revision of the 2004 FTA to e-government, the Fourth Industrial Revolution, cybersecurity and climate change ― the four areas that President Moon Jae-in and Chilean President Sebastian Pinera reaffirmed as having greater partnership potential in 2019 in accordance with their 2018 summit on the sidelines of the U.N. General Assembly in New York.
In particular, the talks with Minister Yoo dealt with Yoo's bid for next general director of the World Trade Organization (WTO).
Under the agreement reached in 2018 summit, Chile and Korea are working closely on the former's “Electronic Government Program” and “National Policy on Artificial Intelligence.”
Chile is also assisting Korea's preparation for the P4G climate summit in 2021.
Bilateral trade volume totaled $6.13 million last year, with Chilean exports reaching $4.43 million.
A top world food producer, Chile's main sales items are wine, fresh grapes, pork, salmon and cherries.
Among them, Yanez said the 16 years of FTA especially helped Chilean wine “have the honor to become first preference for Korean consumers.”
The volume of bottled red wine imported from Chile during the January-June period this year is already near the level of the entire year of 2019, reaching $21 million. The volume of Chilean white wine imports during the first six months of this year already surpassed all of last year's, recording $3 million.
The two most favored Chilean wines among Korean consumers are Reserva and Gran Reserva.
“Our wine has continued to develop to satisfy the needs and concerns of Korean consumers,” Yanez said. “In this way, new varieties, wine blends, innovation and sustainability have been developed in the production process.”
Asked about his favorite, he named cabernet sauvignon varietal, especially the 2017 vintage.
“Also, for some special moments with friends I prefer white wine, such as the chardonnay varietal from the Leyda Valley, Chile,” he said.
The vice minister explained that fresh grapes, along with the nation's climate and long-standing vineyard technology, were behind the quality of Chilean premium wines.
In that regard, he noted that Chilean grapes are becoming popular in Korea, with 41,000 tons worth $115 million imported last year.
In relation to the COVID-19 era, Yanez said cranberries, maqui berries and other Chilean native superfoods that are rich in antioxidants can boost the immune system and could be new exports items to Korea.
Due to sanitary regulations and other measures, they are not imported here yet.
“We want to compete in the high-quality food sector and I think we're very well positioned to offer consumer-related products to Korea,” he said.
The vice minister said circumstances have “changed profoundly” since the FTA was signed. This made it important for the 2004 agreement to be “modernized” and to facilitate related talks, especially on market, trade facilitation, intellectual property, labor, environment and gender-related issues.
“We consider that it is essential to have the highest standards regulating these aspects of our bilateral trade,” he said. “Both our countries now have different interests in each other's markets, and it is important to take this process as an opportunity to boost our bilateral trade by further liberalizing and expanding trade.”
Labor, environment and gender equality are categorized as “new generation disciplines” that are not covered in the 2004 FTA.
And updating the FTA will ensure that “trade is conducted in a responsible manner and that it will bring social benefits, job creation, employment, improvement in living standards and integrating people internationally,” according to the vice minister.
On Korea's bid to become an associate member of the Pacific Alliance ― a trade bloc comprised of Chile, Colombia, Peru and Mexico ― Yanez reaffirmed Chile's support.
“Once the negotiation between the Pacific Alliance and Korea begins and shows progress, we can discuss how the results of our bilateral talks may be incorporated into the structure of negotiations,” he said.