By Kim Sung-jin
Staff Reporter
South Korea is seeking to conclude a free trade agreement (FTA) with Singapore by the end of this year or early next year at the latest.

The Ministry of Foreign Affairs and Trade (MOFAT) said on Monday that the two countries will convene their first formal governmental-level talks on establishing an FTA in the Southeast Asian city state on Jan. 27-29.

In addition, President Roh Moo-hyun will this week personally meet and try to convince representatives of farmers’ organizations that have been protesting against the Korea-Chile FTA to agree to open the market to foreign competition.

``The South Korean government has set a goal to conclude the bilateral FTA talks before the end of this year,’’ said a MOFAT official involved in the FTA negotiations with Singapore.

``But it is uncertain from when the Korea-Singapore FTA will take effect as there remains a final approval procedure by the National Assembly even after signing of the agreement,’’ she said. But she hinted that it is highly likely for the FTA would to go into effect from the first half of 2005.

The talks in Singapore will set the stage for the first formal discussion involving the two countries’ trade, commerce and agricultural officials on the establishment of an FTA.

Forming an FTA with Singapore, the indisputable logistics and finance powerhouse in Asia where global heavyweights operate their Asian regional headquarters, is estimated to bring enormous benefits to the Korean economy, including transfer of advanced management know-how for financial firms.

No Resistance Expected

``The government is expecting to conclude the FTA deal with Singapore even before deals with Mexico and Japan. It is because we expect no resistance from local industrial or farmers groups for clinching the Korea-Singapore FTA,’’ the MOFAT official said.

As Singapore is an importer of agricultural produce and not an exporter of farm products, there is virtually no concern the government will be confronted with intense opposition from specific interest groups similar to the protests against enforcing the country’s first FTA deal with Chile by farmers groups, she said. Agricultural industry accounts for only 0.1 percent of Singapore’s gross domestic product (GDP).

She added forming an FTA with Japan would require at least two years of negotiations as the government has to figure out what specific influences the bilateral FTA would bring about to Korean manufacturing industries.

The FTA meeting will discuss, among other things, how to remove trade barriers and liberalize tariffs and investment. Other topics will cover the financial markets, human resources, small- and mid-sized businesses, broadcasting businesses and information technology.

Economic researchers, business representatives and academics from the two countries conducted joint private-level studies on a Korea-Singapore FTA for six months from March last year.

Last October, Roh and Singaporean Prime Minister Goh Chok Tong agreed to forge ahead for a quick conclusion of the bilateral FTA that would promote mutual trade and investment relations. Singapore is reportedly aiming at providing more finance and banking opportunities here.

Meanwhile, South Korean government held its first official governmental-level talks with Japan in Seoul on Dec. 22 last year.

South Korea signed an FTA with Chile last February but its ratification is still pending in the National Assembly because of fierce protest from farmers who fear the agreement would flood the South Korean market with cheaper Chilean farm products, threatening their livelihood.

President to Persuade Farmers

President Roh will meet with representatives of farmers organizations over lunch today or tomorrow to ask for their cooperation in the ratification of the FTA with Chile, according to Kwon O-kyu, senior presidential secretary for policy planning.

``We are organizing a luncheon meeting between President Roh and farmers groups to facilitate passage of the South Korea-Chile FTA bill in the National Assembly, and it will likely take place on the sixth or seventh (of January),’’ Kwon said.

Last November, Roh vowed that his government would continue to actively seek FTA deals with Japan, Singapore and other neighboring countries to help enhance the nation’s ability to market its products abroad.

The Korea International Trade Association (KITA) yesterday said that as the United States’ FTAs with Chile and Singapore will go into effect starting this month, U.S. exports to those countries will exert considerable injury to Korean exports.

Chile lifted tariffs levied on 87 percent of U.S. imports in line with the implementation of the FTA and will remove all tariffs on products from the U.S. after 12 years. Especially, as Washington requested Chile to immediately remove tariffs imposed on U.S. refrigerators and washing machines, South Korean exports of the like to Chile will be hurt significantly, KITA predicts.

The association added that Korea’s automobile, electronics, appliance and petroleum goods exports to Chile will face a hard time in Chile.

Singapore has removed tariffs on all U.S. imports starting this year and the U.S. has reciprocated by removing tariffs on 92 percent of Singaporean imports. Tariffs slapped on the remaining 8 percent of Singaporean imports will be gradually removed over the next eight years. KITA predicted that South Korean exports will be affected by tariff-free Singaporean wireless telecom equipment, electronic devices and textile goods in the U.S. market.