Korea-Japan Free Trade Agreement Gathers Steam

Reviewed By Hitoshi URABE

Article:
"Korea-Japan Free Trade Agreement Gathers Steam"
http://www.hankooki.com/kt_biz/200203/t2002032219012143110.htm
by Nho Joon-hun, Korea Times: 03/22

Comments:
The trip by Prime Minister Mr. Koizumi to South Korea over the weekend has resulted in a number of notable products. Aside from hopes to have narrowed a very political and sometimes emotional issue of a gap in historical views between the two countries, what can be expected of its practical and positive consequences toward the future is the consensus to begin negotiations for a free trade agreement (FTA).

It has been viewed as somewhat strange, that neither of the two of the most prominent countries in international trade, Japan nor Korea, was participating in any regional or selective multilateral trade agreement. It was only earlier this year that Japan signed its first FTA with Singapore, and Korea still has not yet with anyone. Explanations used to be provided by the Japanese government said that since they had adopted the principle in which trade liberalization should be advanced unilaterally in a non-discriminatory manner, developing a regional trade area would undermine the efforts along those lines, such as at WTO. The reality began to be recognized, however, by the Japanese officials as they saw many, and eventually almost all, the countries in the world opted to participate in some form of regional economic and trade arrangements.

By mid-90's Japan had officially, albeit quietly, changed its policy and began to seek economic ties with other countries. Korea was listed as one with a priority and unofficial negotiations actually began, only to bog down after a while, apparently without detailed explanation for the failure. It was rumored in the circles that since the de-facto economic ties were already very close between Korea and Japan, it was too much of a task for the negotiators at the time, who had almost no experience in such negotiations, to sort out and discuss the vast spectrum of issues, its elements and ramifications.

FTA negotiation is undoubtedly a challenging task. Even when negotiators on both sides discuss in earnest, there will be people in both countries who either gain or lose by how details are worked out in the eventual documents. There will inevitably some reshuffling of industries in both countries along the way, including farming and fishery. When a focus is placed on the weak areas in an economy, it will raise concerns and negative attitudes will easily be formulated. The captioned article cites a comment by a Korean trade official. “What we have to look at is the whole picture and that shows that we have a lot more to benefit from an FTA accord.'' The difficulty in FTA negotiations lies also in maintaining people's trust and confidence, for which careful planning to assure transparency of negotiation and disclosure of relative information is crucial.

Having said that, trade negotiations become very delicate when it gets down to details. It would be a good exercise, to say the least, for the relative parties in both countries to experience such a difficult negotiation, where reciting general principles of free trade naively would not produce meaningful results. This is important because more FTA's need to be sought by Japan, since the pace of globalization of real economy is ever gaining speed, and Japan must stay in the leading pack. It would not suffice for Japan, in domestic nor international context, to move along with, and at the pace of WTO, who must care for all of its members in determining its speed to proceed.