S. Korea, ASEAN sign free trade agreement on investment

By Koh Byung-joon
JEJU ISLAND, South Korea, June 2 (Yonhap) -- Leaders of South Korea and 10
Southeast Asian countries signed a free trade agreement (FTA) Tuesday on
investment, capping years of negotiations aimed at removing tariffs and
bolstering bilateral trade between the two regions.
South Korean trade minister Kim Jong-hoon signed the deal on investment
liberalization and protection with his counterparts from the 10-member
Association of Southeast Asian Nations (ASEAN) on the sidelines of the
Korea-ASEAN special summit underway here to mark the 20th anniversary of dialogue
partnership.
"The investment deal aims to provide protection for investments and investors,"
the Ministry of Foreign Affairs and Trade said in a statement. "The pact includes
stipulations that investors be given fair and sufficient protection and safety.
They should be guaranteed transparency and allowed the right to use
investor-state dispute settlement procedures."
The signing event comes after both sides reached an FTA on investment in April
this year, marking an end to years of negotiations over the removal of tariffs
and expansion of trade, investment and other business opportunities with the
regional economic and political group.
The ministry expects that the agreement with each member of ASEAN will go into
effect within a year. ASEAN is comprised of Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, Singapore, Thailand, the Philippines and Vietnam.
"We will closely consult with related agencies and each ASEAN country to enact
the deal on investment as soon as possible. It will take around a year to enact
the deal with all ASEAN members," the ministry said.
Following the first round of negotiations that started in February 2005, South
Korea and ASEAN had pushed for FTAs mainly in three areas -- merchandise, service
and investment. Both sides enacted FTAs on merchandise and service on June 1,
2007 and May of this year, respectively.
The FTA would solidify economic relations between South Korea and ASEAN
countries, which are witnessing significant expansion in overall trade since they
established a "dialogue partnership" in 1989.
According to the trade minister, South Korean trade with ASEAN amounted to
US$90.2 billion in 2008. Its investment in the region amounted to $5.9 billion
last year. The expanded exchanges made South Korea ASEAN's third-largest trading
partner following China and the European Union, while ASEAN is the fifth-largest
partner for South Korea.
ASEAN holds high potential thanks to its large consumer base and relatively-fast
economic growth, experts say. It has a population of 590 million with combined
gross domestic product amounting to $1.28 trillion, the single largest economic
block in the world.
"We expect the latest FTA deal with ASEAN countries will provide a legal
framework to expand bilateral investment," the ministry said.
The investment deal is the latest trade-boosting agreement for South Korea, which
currently has similar pacts with Chile, Singapore, and the European Free Trade
Association. A free trade deal with the United States is awaiting parliamentary
ratification.
kokobj@yna.co.kr
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