1 Korea’s FTA strategies & Effects of Korea-EU FTA

Transcript:1 Korea’s FTA strategies & Effects of Korea-EU FTA:
1 Korea’s FTA strategies & Effects of Korea-EU FTA Korea’s FTA strategy began ten years ago 2 Korea chose FTA as major growth engine to overcome the 1997 financial crisis Korea needed a further access to global market in order to overcome the crisis in 1997, which hit its economy very hard Korea’s decision to push forward FTA negotiations was also based on the need for further reform of its economy Korea’s first FTA partner was Chile: Negotiation was completed in 2002 and agreement came into force in 2004 FTA 1.0 Source: IMF Evolution of Korea’s FTA strategy 3 In 2003, Korean government introduced ‘FTA Roadmap’, a long term plan for future trade & investment negotiations Indicated major FTA partners and areas for liberalisation Completed negotiations with EU and US in the late 2000s: These were key achievements of ‘FTA Roadmap’ Korea-EU FTA and Korea-US FTA came into force in ‘11 and ‘12, respectively FTA 2.0 In 2013, Korean government announced ‘New Trade Roadmap’, a new plan for the next decade Plans to play the role of a linchpin in TPP led by US and RCEP led by China Began FTA negotiation with China, participated in RCEP negotiations, and stated intention to consider joining the TPP in 2013 Plans to expand trade with resource rich countries and emerging economies FTA negotiations were completed with Australia in 2013 and Canada in 2014 Currently negotiating with Indonesia and Vietnam FTA 3.0 Korea’s FTA network in 2014 4 As of April, 2014, no. of Korea’s FTA partner countries stands at 47 through 9 agreements in force Chile, Singapore, EFTA, ASEAN, India, E.U., Peru, U.S., Turkey Compared to Korea’s major competitors… With FTAs with the US and the EU, the share of trade with FTA partners almost trebled since 2009 to 35.3% in 2013, surpassing China and Japan Share of home country & FTA partners’ GDP in the global economy is 56% for Korea, much higher than that for China(16.2%) or Japan(17.2%) Source: KITA IIT Source: KITA IIT Notable trends in Korea-EU trade relations 5 Korea → EU: Motor vehicles, Cruise ships, Telephone sets, Motor parts EU → Korea: Motor vehicles, Petroleum oils, Machines and apparatus, Aircrafts With a rapid rise in Korea’s imports from the EU, net trade balance has turned negative Share of EU in Korea’s exports is declining fast Rise of Asian trade partners such as Vietnam and Indonesia Eurozone fiscal