Korea, US to Hold FTA Financial Talks on May 19
By Kim Sung-jin
Staff Reporter
South Korea started fine-tuning its negotiation strategies for the first round of free trade agreement (FTA) financial service sector negotiations with the United States due on May 19.
The Ministry of Finance and Economy (MOFE) said Tuesday that it had drawn up the draft of the agreement and began working-level discussions to iron out differences among parties engaged in the financial service industry.
“The key issues of the Korea-U.S. FTA in upcoming negotiations will be cross-border financial transactions, opening of local financial derivatives market and ways of liberalizing the local financial markets,’’ a MOFE official said.
“We plan to take a prudent approach on cross-border financial transaction issues,’’ he said.
Cross-border financial transaction refers to allowing provision of financial services crossing the border by financial institutions without setting up branch offices or local subsidiaries in the FTA partner country.
As for financial derivatives that are provided in the U.S. but are not in service in Korea, the ministry plans to use the FTA signed between the U.S. and Singapore as a benchmark in its talks with the U.S.
“There’s a fear that a Korea-U.S. FTA could bring about a serious financial crisis in Korea if the Korean government clinches the agreement with the U.S. when its financial authority still has weak power,’’ said You Jong-il, professor of School of Public Policy and Management of the Korea Development Institute (KDI).
Korean Confederation of Trade Unions (KCTU) vice president Heo Young-goo shared a similar view that the U.S.’ target in the proposed bilateral FTA with Korea is its financial market, not agricultural or film markets.
“The public attention on Korea-U.S. FTA has been centered on screen quotas and agricultural market opening rows,’’ Heo said.
“But the real target of the U.S. in its bilateral free trade pact with Korea is the 1,000-1,200 trillion won Korean financial market, including 200 trillion won pension market and savings banks, private loan and retirement pension markets,’’ Heo noted.
Heo advised that the government therefore should approach the financial service sector negotiations in a highly discreet manner.
sjkim@koreatimes.co.kr
05-09-2006 18:04
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