Ministry of Trade, Industry and Energy

Korea-Australia Trade Ministers to sign Korea-Australia FTA

On April, 8, the Minister of Trade, Industry, and Energy, Yoon Sang-jick and the Australian Trade and Investment Minister, Andrew Robb jointly signed the Korea-Australia FTA. The Korea-Australia FTA is the 11th such trade deal for Korea, and makes Australia the country’s 48th FTA partner. The size of FTA markets now stands at 57.3% of GDP (9 ratified FTAs + 2 signed FTAs), with Korea's trade with FTA nations accounting for 39% of its total trade. Bilateral trade between Korea and Australia surged from $18.0B in 2007 to $30.3B in 2013. In addition, around 81% of Korea's total investment in Australia was made during the same period, mostly in the energy • resources sectors, raising hopes for widening trade and investment. As Australia has abundant natural resources, the country is Korea's 5th largest import country for mineral resources. Under the FTA, a stable supply of resources is expected, as the FTA can help strengthen cooperation in resources sector and improve reliability in investment. Under the Korea-Australia FTA, it is expected that our exports to Australia will increase, particularly in the current major export items (automobiles, automotive components, heavy equipment for construction, synthetic resin, steel products, etc.). In particular, Korea's SMEs are expected to benefit from reduced tariffs on promising export items such as automobile bumper, optical fiber cable, filters for air purifiers, foods, cosmetics, and others. Under the Korea-Australia FTA, the parties have agreed on the following: l Market access of goods – With the deal in effect, tariffs on almost all trading items will be eliminated within ten years. (Almost all Australian tariffs will be phased out over five years.) l Automobiles – Both parties agreed to immediately abolish tariffs on mid-size gasoline automobiles (1500~3000cc) and compact gasoline automobiles (1000~1500cc) among the automobiles (tariff rate 5%) exported from Korea to Australia. l Automotive components – Tariffs on tires (tariff rate 5%) are eliminated immediately, with tariffs on automobile components (tariff rate 5%) such as gear box, body components, brakes, and buffers to be abolished within three years. l Home appliances and general machinery – Tariffs on most major home appliances and general machinery such as TVs, refrigerators, laundry machines, heavy equipment for construction, and textile machinery are eliminated. l Steel and petrochemical – Tariffs on most major steel products such as cold/hot rolled carbon steel sheet and metal coated steel sheet and petrochemical products such as synthetic resin are abolished immediately. l Agricultural and livestock industry - To protect Korea's sensitive agricultural and l date2014-04-09

Actively Participating in Discussions on Regional Economic Integration in Asia

The 4th round of Regional Comprehensive Economic Partnership (RCEP) negotiations was just held in Nanning, China, over a five-day period that spanned from March 31 (Mon) to April 4 (Fri), 2014. Approximately 500 people from 16 different RCEP member countries took part in the negotiations. The Korean delegation, which was headed by Director-General for FTA Negotiations of the Ministry of Trade, Industry & Energy Kim Young-moo, included officials from the Ministry of Strategy and Finance, the Ministry of Agriculture, Food and Rural Affairs, and the Ministry of Oceans and Fisheries. In this fourth round of negotiations, the participating countries continued active discussions in the areas of Goods, Services and Investment, while also launching discussions on Competition, Intellectual Property Rights, and Economic & Technical Cooperation. The discussions focused on key elements, the scope of negotiations and the Scoping Paper that would be included in the agreement. As well, the participating countries had active discussions about including cooperation among Small & Medium Enterprises, E-commerce, and Government Procurement on the agenda for negotiations. The government will also actively participate in discussions of relevant areas such as Competition & Intellectual Property Rights to take RCEP to another level of comprehensive FTA negotiations. The next meeting (5th round of RCEP negotiations) will be held in June 2014 in Singapore. date2014-04-07

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