ASEAN, South Korea ink economic cooperation pact

Asian Economic News, Dec 13, 2004

VIENTIANE, Nov. 30 Kyodo

The Association of Southeast Asian Nations and dialogue partner South Korea signed a joint declaration Tuesday highlighting an ASEAN-South Korea Free Trade Area during an annual gathering of regional leaders.

The AKFTA agreement was inked by the 10 ASEAN leaders and South Korean President Roh Moo Hyun during the two-day ASEAN Summit in Vientiane.

The annual gathering brings together the leaders of the 10 ASEAN countries and their dialogue partners China, Japan, and South Korea.

The AKFTA objective is to move toward deeper economic integration between the region and South Korea through ''progressive elimination of all forms of barriers'' to trade in goods, services and investment through trade and investment facilitation and economic cooperation measures.

In 2003, ASEAN-South Korea two-way trade reached $32.2 billion.

The South Korea's cumulative investments in ASEAN were $11 billion by the end of 2003, 15.2 percent of South Korea's foreign direct investment.

Details of the free trade agreement will be further discussed next year.

''The negotiations on AKFTA shall commence in early 2005 and be completed within two years. AKFTA will be realized at an earlier date, whereby at least 80 percent of products will have zero tariffs in 2009, and with consideration for special and differential treatment and additional flexibility for new ASEAN member countries,'' the joint declaration on comprehensive cooperation partnership between ASEAN and South Korea says.

AKFTA will have two timelines for the South Korea, one with older ASEAN states and one with the newer members.

China and Japan have already signed trade agreements with ASEAN.

ASEAN has a population of 500 million people with a combined gross domestic product of more than $680 billion and a total trade value of $712 billion.

AKFTA will include provision for flexibility, including special and differential programs, especially for the newer ASEAN members to address the different levels of development among the member countries and enable them to participate fully and to obtain full benefits from AKFTA.

ASEAN has been turning to the three regional partners China, Japan and South Korea as potential top trade destinations.

''With evolving developments in the multilateral trading environment and other growing global challenges, there is a need for both sides to forge a comprehensive economic partnership to provide impetus for even stronger dialogue relations and trading partnership,'' the declaration says

On economic cooperation, South Korea will assist ASEAN in securing the necessary physical and knowledge-based infrastructure to harness information, knowledge and technology to improve the welfare, education and competitiveness of the local communities.

And with that commitment, South Korea will increase its contribution to $5 million to the ''ASEAN-ROK special cooperation fund.''

And a detailed action plan will be developed at the ministerial level for consideration and adoption at the ASEAN-South Korean summit in 2005 in Malaysia.

Although economic issues dominated the talks among Roh and the leaders of Thailand, Singapore, Indonesia, Malaysia, the Philippines and Brunei and the news ASEAN members Cambodia, Vietnam, Laos and Myanmar, they did not ignore the political tension on the Korean Peninsula.

''The leaders of the ASEAN and South Korea did exchange views on the Korean Peninsula and urged the resumption of the six-party talks (on North Korea's nuclear ambitions) as early as possible,'' the Cambodian delegation said.