Ministry of Trade, Industry and Energy

4th Regional Comprehensive Economic Partnership (RCEP) Negotiations

The 4th round of Regional Comprehensive Economic Partnership (RCEP) negotiations will be held in Nanning, China for five days, from March 31 (Mon) to April 4 (Fri), 2014. The Korean delegation, headed by Director-General for FTA Negotiations of the Ministry of Trade, Industry & Energy Kim Young-moo, will include officials from the Ministry of Trade, Industry & Energy, the Ministry of Strategy and Finance, the Ministry of Agriculture, Food and Rural Affairs, and the Ministry of Oceans and Fisheries. * RCEP (Regional Comprehensive Economic Partnership): 16 countries, including 10 ASEAN countries, Korea, China, Japan, Australia, New Zealand, and India, engage in discussing economic integration in the Asia Pacific region. At the fourth round of negotiations, discussions will be held on the methods for Liberalization of Goods, Services and Investment, as well as Regulations and Cooperation issues (Competition, Intellectual Property Rights, Economic & Technical Cooperation, etc.). In order to achieve effective market liberalization in Goods, Services and Investment, negotiations will be carried out with a focus on the modalities (negotiation method, negotiation goal, etc.) proposed by various countries. The discussions will also cover key elements of interest to Korea in the comprehensive FTA negotiations, such as Competition & Intellectual Property Rights. The goal of the RCEP is to conclude a comprehensive, high level FTA among participating countries. This year, 4 rounds of negotiations and 1 ministerial-level talk will be held. date2014-03-31

Gaps Remain between Korea and China on Major Issues, including Goods

The 10th round of FTA negotiations between Korea and China was held at KINTEX, Ilsan, for five days from March 17 (Mon) to 21 (Fri), 2014. Officials from the relevant Ministries participated in the negotiation, with the Korean delegation led by Woo Tae-hee, Assistant Minister for Trade & Chief Negotiator for FTAs of the Ministry of Trade, Industry and Energy, and the Chinese delegation led by Wang Shouwen, Assistant Minister of Commerce. During the 10th round of negotiations, the Parties discussed a range of issues, including Tariff Concession, Services, Investments, Regulations and Cooperation issues. Both Parties discussed tariff concessions for specific items, based on the already exchanged Offers and Requests. Both parties requested improved market access for areas of mutual interest, but could not reach agreement due to the significant differences between the two countries’ positions. The two countries will continue to negotiate on market access for goods, and seek ways to decide on the specific handling of each item currently under contention. The parties also had technical discussions based on the draft text, in areas such as Trade Remedy, Rules of Origin, Customs Procedures & Trade Facilitation, SPS and TBT. The two countries also continued their discussions on services, investments, intellectual property rights, competition, the environment, general provisions, e-commerce and economic cooperation (including agricultural and fisheries cooperation, industrial cooperation and government procurement). The parties decided to host the 11th round in China, at a time and place to be determined. date2014-03-24

Evaluation of the Korea-US FTA after Two Years

Korea-US trade volume rose by 4.1% ($197.4B→$205.4B) following the implementation of the KORUS FTA. In the second year of the FTA, the trade volume of products that benefited under the pact rose by 13.0% ($41.7B→$47.1B), but the trade volume of products that were excluded from the agreement was down by 8.6% ($62.6B→$57.2B). Since the FTA took effect, Korea's exports to the US have grown faster than total exports, which has meant that the agreement has served as a sustaining pillar for exporters. Exports of products included in the FTA grew for two consecutive years (1st year 1.6%→2nd year 5.4%), with continuous growth in automobile parts (11.5→8.3%) and petroleum products (36.1→5.9%*). However, the growth rate in those sectors dropped sharply due to falling export prices and the extension of overseas oil refinery facilities. Exports of excluded items decreased (-3.5%) during the first year of the FTA, but went up in the second year (5.7%). Exports of wireless communication devices plunged during the first year of the FTA (-34.1%) only to go up again during the second year (31.3%), thanks largely to a boom in the LTE market. Exports of automobiles rose (16.5→14.7%) over the two years, due to improved quality and brand awareness. Exports of Korean agricultural products and food grew by 21.4% during the second year of the FTA, and by 9.5% during the first year. (Mar 2013~Feb 2014) It also rose in all sectors, including processed food, fruits • vegetables, livestock products, and forest products. In particular, exports of processed food (e.g., tobacc date2014-03-18

Korea, China Hold 10th Round of FTA Negotiations

The two parties will continue talks in the areas of goods, services, investment, regulations, and fields for cooperation. Items on the agenda for each sector include: - Goods: Hold concession negotiation for each product category along with drafting consolidated text in the areas of goods, product origin, customs procedure, sanitary and phytosanitary (SPS), technical barriers to trade (TBT), and trade remedies - Services & investment: Discuss methodologies of liberalization and agreed documentation in service & investment - Regulations & cooperation: Discuss agreed documentation in the areas of intellectual property rights, competition, E-commerce, transparency, environmental & economic cooperation date2014-03-17

The Results of the 4th Korea-China-Japan FTA Negotiation

The 5th round of negotiations will be held in China in July, but the specific schedule still needs to be agreed upon among the three countries. In order to lay the foundation for the economic integration of East Asia, the government will actively participate in the Korea- China-Japan FTA negotiation; and work on the negotiation in consideration of the need for consistency among the Korea-China FTA, the Korea-China-Japan FTA and RCEP*. * RCEP: Regional Comprehensive Economic Partnership (participated in by ASEAN, Korea, China, Japan, Australia, New Zealand and India) date2014-03-10

Korea and Australia Initialize FTA.

Woo Tae-hee, Assistant Minister for Trade and Chief Negotiator for FTAs of the Ministry of Trade, Industry and Energy and Assistant Secretary Jan Adams of the Department of Foreign Affairs and Trade, the chief representatives of both countries, initialized the Korea-Australia FTA and signed the Joint Statement of confirmation at the Department of Foreign Affairs and Trade in Canberra, Australia, on February 10, 2014 (Mon). date2014-03-04

5th Official Negotiations for Korea-New Zealand FTA To Be Held (Feb 17 through 21)

The 5th negotiation for the Korea-New Zealand FTA will be held in Wellington, New Zealand, from February 17 (Mon) to February 21, 2014. ※ Date and Location: February 17 (Mon) through February 21 (Friday), 2014, Wellington, New Zealand ※ Participants - (Korea) Lee Seong-ho, Deputy Director-General of the Ministry of Trade, Industry and Energy (Chief Representative) and members of government delegations from the Ministry of Trade, Industry and Energy, the Ministry of Strategy and Finance, the Ministry of Agriculture, Food and Rural Affairs and the Ministry of Oceans and Fisheries - (New Zealand) Martin Harvey, Director of the Ministry of Foreign Affairs and Trade (Chief Representative) and members of government delegations from the Ministry of Foreign Affairs and Trade, the Ministry of Primary Industries and the Ministry of Business, Innovation and Employment Both parties will make efforts to come up with solutions to the remaining issues across the FTA negotiation areas between the two countries (market access and agreement). date2014-02-14

Korea and Australia Initialize FTA

Both parties agreed to the official signing of the FTA during the 1st half of this year, and the enforcement of the FTA as soon as possible according to the procedures required in both countries. The English version of the Korea-Australia FTA initialized on February 10 will be disclosed at the FTA website of the Ministry of Trade, Industry and Energy (www.fta.go.kr), and the Korean version (draft) will be disclosed after the disclosure of the English version following the required reviews. date2014-02-14

MOTIE Enhances Economic Cooperation with Central European Countries

The Ministry of Trade, Industry and Energy (Minister: Yoon Sang-jik) selected Hungary and Rumania as its first target countries in the emerging markets in which its market development activities for 2014 will be implemented, and dispatched an economic mission headed by Vice Minister Kim Jae-hong to these countries from January 25 to 29. The economic mission includes government agencies like the Ministry of Trade, Industry and Energy (MOTIE), the Small and Medium Business Administration and the Defense Acquisition Program Administration, and support institutions such as the Korea Chamber of Commerce & Industry, KEPCO, Korea Institute of Industrial Technology, Korea Trade Insurance Corporation and Korea Line Corporation. Hungary is Korea‟s 10th biggest trading partner among the EU countries and is one of the key trade bases from which Korean companies can advance into the Western European and the Balkan markets. Currently, major Korean companies like Samsung Electronics and Hankook Tire are expanding their investments in Hungary, which has included the installation of new factories. In addition, Hungary exited from the Excessive Deficit Procedure (EDP*) in 2013 after 9 years of the EU's budget scrutiny program, and has been focusing on its new “Look East” policy to enhance its economic partnerships with Asian countries. * A country subject to EDP is a member state that has breached or is in risk of breaching the deficit threshold of 3% of GDP, and as such is subject to restrictions on budgeting and EU funds. The economic mission held the first „Korea-Hungary Joint Economic Committee‟ on January 27 and discussed issues related to national cooperation between Korea and Hungary in various fields, including trade investment, creative economy, national defense and SME promotion. * Chief of Delegation:Minister of Trade, Industry and Energy (Korea) , Minister of Economy (Hungary) The parties entered into an MOU in 4 areas, which were establishing a cooperative network for SMEs, specialized nuclear human resource development, cooperation for technical innovation and ECA agreement, and they agreed to cooperate in a comprehensive manner for Korean exports of electronic trading systems and technology in the field of the defense industry. * MOU: KEPCO, KNA - Hungary Budapest University of Technology (nuclear specialist development), Small and Medium Business Administration – Hungary‟s Ministry of Economy (support for SMBs), Korea Institute of Industrial Technology – Hungary‟s National Innovation Agency (technical innovation), Korea Trade Insurance Corporation – Hungary‟s ECA (trade insurance) As well, 2014 marks the 25th anniversary of the establishment of diplomatic relations between Korea and Hungary, and the Chambers of Commerce & Industry of both countries jointly held an economic cooperation forum in which major companies of both countries participated. During his congratulatory address, Vice Minister of Trade, Industry and Energy Kim Jae-hong discussed Korea‟s new creative economy policy and proposed that the two countries pay more attention to promoting world-leading innovative companies through joint research and development and industrial innovation activities using the EU fund. The economic mission is scheduled to visit Rumania and hold a Korea-Rumania industrial cooperation committee to discuss cooperation between the two countries. In this committee, Vice Minister Kim Jae-hong is planning to ask the Rumanian government for cooperation in resolving difficulties* experienced by Korean companies in Rumania. * Difficulties in investment due to the reduction of renewable energy incentives (Samsung C&T Corporation), Rumanian government‟s non-fulfillment of public waters dredging (Daewoo Mangalia shipyard) * (Main agenda of Korea-Rumania date2014-01-29

3rd Regional Comprehensive Economic Partnership (RCEP)

The 3rd RCEP (Regional Comprehensive Economic Partnership) negotiations were held from January 20 (Mon) to 24 (Fri), 2014 in Kuala Lumpur, Malaysia. At the negotiations, the Chief Negotiator for Trade of the Ministry of Trade, Industry & Energy Woo Tae-hee attended as the Head of the Korean delegation, joining representatives from a total of 16 countries including the 10 ASEAN countries* and 6 AFP countries (Korea, China, Japan, Australia, New Zealand, India) that signed FTAs with ASEAN. ※ 10 ASEAN countries: The Philippines, Malaysia, Singapore, Indonesia, Thailand, Brunei, Vietnam, Lao PDR, Myanmar, Cambodia At the third round of negotiations, discussions were held on the methods for liberalizing goods, services and investments, as well as cooperation in the area of standards (competition, intellectual property rights, dispute settlement, economic & technical cooperation, etc.). The details are as follows: - Negotiations were carried out focusing on modalities (negotiation method, negotiation goal, etc.) proposed by various countries in the Trade in Goods Working Group. Also, in the Sub-Working Groups of Rules of Origin (ROO) and Customs Procedures & Trade facilitation, discussions were focused on what to be included in these areas - Working Group meetings were also held for the service and investment sector, respectively, and member countries exchanged opinions regarding liberalization method & elements to be covered in the text In addition to the goods, services and investments sectors, discussions were also held on the standards and fields of cooperation. At these negotiations, the participating countries agreed to establish four Working Groups for competition, intellectual property rights, dispute settlement, and economic & technical cooperation, respectively. In the rules area, Korea’s interested areas, such as Competition & Intellectual Property Rights, were included, thus providing us with the basis to reflect our national interests. Furthermore, it is expected that the negotiations will eventually develop into a comprehensive RCEP, covering a wide range of areas. ※ Our delegates led the discussions in the competition and dispute settlement areas by circulating proposals and making presentations. It was agreed that the next meeting (4th RCEP Negotiations) would be held in China in April. Currently, the RCEP is holding discussions, with the goal of reaching an agreement by 2015, and is scheduled to have four rounds of negotiations this year. 3rd Regional Comprehensive Economic Partnership (RCEP) Negotiations Contact Information East Asia FTA Planning Team, Director Cho Su-jeong (☎ 010-4603-9624) date2014-01-28