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Korea, Singapore Agree on Free Trade Pact
Dec. 20, 2004
Korea and Singapore agreed on the key issues of a bilateral free-trade agreement and they expect to sign the pact in December, as targeted, the government announced on November 29.
Singapore is Korea's seven-largest export destination, with annual trade volume roughly at $8 billion. Korea's exports to the city-state mostly consist of semiconductors, mobile communication gear, computers, petrochemical goods, ships and related parts, making up about 70 percent of the total. The bulk of imports from Singapore are computers and petrochemical products, which is why some local companies protested the trade pact.
The agreement with Singapore would Korea's second free-trade pact. In February, it signed Chile. Talks are continuing for similar accord with Japan by the end of 2005. Previously, Korea was one of only two members of the World Trade Organization without a free-trade agreement. The other was Mongolia.
Next year, Korea hopes to enter talks with ASEAN and the European Free Trade Association countries. Mexico, India, Canada and the members of Mercosur also are candidates. "Bilateral free trade agreements are part of trend that we can not afford to ignore, and hopefully, this second agreement will create a strong platform for Korea in its pursuit of such accords," said Kim Jae-cheol, Chairman of the Korea International Trade Association. He stressed that although Singapore has already eliminated duties on most imports, the country would make a particularly attractive partner due to its status as Southeast Asia's financial and service nerve center.
The Foreign Ministry said Korea and Singapore reached a consensus on nine broad areas, including protection of intellectual property rights and emergency safeguards in case market share of products from one country rise too fast.
Another measure would give products made at an industrial complex in Gaeseong, the North Korean border city, equal status as those made in South Korea. This is expected to help boost investment in the complex, which is expected to see output begin in December.
Regarding trade in goods and services, Singapore will fully lift tariffs on all but a few Korean-made products, while Korea will do likewise, except for agricultural produce and a few industrial goods.
Korea initiated trade negotiations with Singapore in January this year, aiming for a deal by the end of this year. The trade deal was first broached in September 1999 by then Singapore Prime Minister Goh Chok Tong.