Asean signs FTA with South Korea after Thailand opts out
South Korea signed a Free Trade Agreement (FTA) with the Association of Southeast Asian Nations on Tuesday but founding member Thailand was left out due to internal disagreements and objections to Seoul’s barriers on farm products.
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The Nation | Bangkok | 16 May 2006
Asean signs FTA with South Korea after Thailand opts out
Manila — South Korea signed a Free Trade Agreement (FTA) with the Association of Southeast Asian Nations on Tuesday but founding member Thailand was left out due to internal disagreements and objections to Seoul’s barriers on farm products.
“We have been able to sign a very liberalizing FTA” on goods, said South Korean Trade Minister Kim Hyun-Chong at the close of a three-day conference of Asean trade ministers in the Philippine capital.
Bangkok was left out of the agreement that takes effect in July, said Asean Secretary General Ong Keng Yong, although he stressed that Thailand would sign the FTA as well as soon as it settles its “internal processes.”
Ong said Thailand decided to step aside rather than hold the rest of Asean back over its demand that the FTA with South Korea should cover rice, one of Thailand’s key exports.
South Korea has been protective of its rice industry and is seeking to have it excluded from the FTA.
“As soon as the domestic situation merits, (Thailand) will join and sign the Asean FTA,” he said.
Under the accord, “Asean and South Korea agreed to liberalize our trade and work towards increasing the exchange of goods on both sides and removing obstacles to this agreement,” Ong said.
He did not specify which products would be covered by the FTA.
He and Kim stressed that the accord would open the way for more trade and investment between Asean and South Korea.
Thai Vice Trade minister Uttana Savanayana said earlier that the issue of Thai rice exports to South Korea was a major concern but that other agricultural items were also issues of contention.
South Korea and Asean signed a deal in December, setting a framework for the implementation of an FTA this year.
The proposed accord specifies that South Korea and each Asean country may choose up to 40 items that can be excluded from tariff reductions for an unspecified period.
South Korea wants to put rice on its protected list to the dismay of Thailand, the world’s number-one rice exporter.
Under the original deal South Korea and six Asean countries — Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand — were due to start cutting tariffs from July.
The deal will come into effect with the other four Asean members — Cambodia, Laos, Myanmar and Vietnam — at a later date.
Asean has already negotiated a free trade deal with China, aiming to create the world’s biggest free trade zone by 2010 with a combined population of nearly two billion people.
Japan is also trying to push for individual free trade deals with a number of Asean members including the Philippines and Vietnam, among others.
Agence France Presse