S. Korea signs trade accord with nine Southeast Asian nations
S. Korea signs trade accord with nine Southeast Asian nations
Jae-Soon chang, Associated Press/Kuala Lumpur
South Korea on Friday signed an accord on eliminating tariffs on
goods with nine Southeast Asian nations, leaving out Thailand for
now because of dispute over rice, but paving the way for a wider
free trade pact with the region.
The accord to free up trade in goods by 2010 and create a
market of 548 million people with a combined economy of more than
US$1.4 trillion was signed by trade ministers of South Korea and
all members of the Association of Southeast Asian Nations except
Thailand.
South Korean Foreign Minister Pan Ki-moon called it "an
agreement with ten minus one." Thailand said it expects to join
the pact by next year after negotiations.
Despite Thailand's exclusion, leaders of all 11 nations were
set to go forward with the comprehensive free trade pact when
South Korean President Roh Moo-hyun meets on Tuesday with
counterparts from the 10 ASEAN countries.
Thailand, the world's top rice exporter, objected to South
Korea's insistence on excluding rice from the goods accord.
Seoul, which faces an often-militant farm lobby at home, keeps
its doors shut to foreign rice through high tariffs and subsidies
for small-plot farmers.
Thai Commerce Minister Somkid Jatusripitak said "rice is a
very important issue for Thailand because more than 70 percent of
Thai people are farmers."
"Once you take rice out of the list I think both Thailand and
Korea have to spend time to discuss further to find a rice
solution," he said. "I think it will not take too long. Maybe
three or six months. We need some more time to discuss. We
decided to defer -- not today. The time has been too short."
Malaysia's International Trade and Industry Minister Rafidah
Aziz said the agreement on trade in goods will come into force on
July 1, 2006 with a gradual cut in tariffs on a list of agreed
products.
Both sides will eliminate tariffs on all agreed products by
Jan. 1, 2010, although the six developed members of ASEAN will
have flexibility to remove tariffs on 5 percent of products by
2012, she said in a statement.
The remaining three, poorer ASEAN members were given a later
but unspecified deadline.
ASEAN-Korea trade last year amounted to US$40.2 billion
(US$33.9 billion), up nearly 25 percent from 2003, she said.
Despite strong pressure from rice farmers, the South Korean
government has taken steps to lower import barriers. It concluded
an accord with nine rice exporting countries including the United
States and China to increase mandatory rice imports from 4
percent of domestic consumption to 8 percent by 2014. The accord
calls for fully opening the market thereafter.
Farmers in South Korea claim that they are already heavily
indebted and that their plight would worsen if cheaper foreign
rice floods into the country.