SKorea, ASEAN complete sweeping free trade agreement

SKOREA: South Korea and Southeast Asia on Tuesday completed a sweeping free trade agreement which they hope will nearly double two-way trade to 150 billion dollars by 2015.

Trade ministers from South Korea and the Association of Southeast Asian Nations (ASEAN) signed the pact to liberalise investments on the final day of a summit by their leaders on the southern island of Jeju.

The investment accord is the final plank of a comprehensive free trade agreement that also covers trade in goods and services. Pacts opening up trade in goods and services are already in force.

“We expressed our expectations that the trade volume between ASEAN and the ROK will increase to 150 billion US dollars by 2015 through the ASEAN-ROK FTA and other complementary trade arrangements,” the leaders said in a joint statement.

ROK refers to Republic of Korea, South Korea’s formal name.

Two-way trade doubled to 90.2 billion dollars in 2008 from 46.4 billion dollars in 2004.

The completion of the free trade pact comes amid a push by South Korea to further increase its presence and influence in ASEAN, a 10-nation bloc with a combined population of more than half a billion people.

Analysts said China and Japan are already ahead in engaging ASEAN, which has a combined gross domestic product of around 1.3 trillion dollars.

South Korea’s finance ministry said the country sees ASEAN “as an export market which can offset sluggish markets in developed countries,” especially after the global financial crisis.

Apart from exports, its companies are also expected to benefit since infrastructure spending is a major part of government stimulus packages in Southeast Asia, ASEAN officials have said.

South Korea can also secure better access to ASEAN’s massive wealth in natural resources including timber, rubber and oil and gas.

Indonesian Trade Minister Mari Pangestu told AFP in an interview on Monday that her country exports 4-5 billion dollars worth of natural gas to South Korea annually.

South Korea also buys food and fish products as well as footwear, textile and paper and pulp from Indonesia.

Seogwipo, Tuesday, AFP