Opinion: FTA with South Korea: strategic modernization for Chile
Rodrigo Yáñez, Director General of International Economic Affairs (DIRECON): When you talk about South Korea, you are talking big. It is one of Asia’s most developed economies and the 14th biggest in the world, and its industrial growth in areas like steel, cars and technology is impressive. Signing Latin America’s first FTA with Asia 14 […]
Rodrigo Yáñez, Director General of International Economic Affairs (DIRECON):
When you talk about South Korea, you are talking big. It is one of Asia’s most developed economies and the 14th biggest in the world, and its industrial growth in areas like steel, cars and technology is impressive.
Signing Latin America’s first FTA with Asia 14 years ago was a tremendous achievement for Chile, and we hope to continue building on this through the FTA modernization process that will begin this year.
South Korea is currently Chile’s fifth largest trading partner — after China, the United States, Brazil and Japan — and the fourth largest market for our shipments. In 2017, trade between the two countries totaled US$6.15 billion, representing 5% of Chile’s foreign trade.
The FTA means that not only are Chilean products sold in Korea, but also that televisions, automobiles and cell phones are less expensive in Chile. Chile’s liberal trade policies have led to the creation of thousands of jobs, access to development, cooperation and experience on technological and education issues — all of which ultimately translate into opportunities.
Now it is time to go further. The current FTA excludes some products from preferential tariffs, particularly the 370 products on the Doha Development Agenda (DDA). The majority of these products are agroindustrial and represent great potential for our exporters. These restrictions would be lifted upon the conclusion of the DDA but, as the DDA negotiations are stalled, progress must be made through the modernization of the FTA, as South Korea has already done with Mexico and the United States.
The new issues that represent international trade challenges must be also be addressed. The modernization does not rule out future approaches via the CPTPP and the Pacific Alliance. South Korea, already an observer member of this integration process, recently announced its aspiration to become a Member State at the Puerto Vallarta Summit.
The Pacific is the backbone upon which we aim to continue building closer relationships with South Korea, China, India and other Asian markets. The major items on the agenda of the Foreign Affairs Ministry and Direcon, supported by the leadership of President Piñera and Foreign Affairs Minister Ampuero, include hosting the 2019 Asian Pacific Economic Cooperation (APEC) meeting and creating a great free trade agreement for the region.
The Asia-Pacific region and South Korea are certainly fundamental to this goal. The Free Trade Agreement we signed was the first port of entry to a continent that breathes opportunity, dynamism and growth. 10 of Chile’s 26 free trade agreements are with Asian countries, and nearly 50% of Chile’s trade is with Asia. That is why we must continue strengthening our ties. Asia-Pacific and South Korea are synonymous with the future and we will seek to maximize opportunities for our natural path toward the region.