APEC Ushers Korea into Realm of Advanced Nations
With just two weeks left before the opening of the APEC Summit at Busan, Kim Hyun-chong, Minister for Trade at the
Ministry of Foreign Affairs and Trade of the Republic of Korea (ROK), and co-chairman for APEC, recently held an
interview with Korean reporters.
In the interview, he voiced his views concerning the significance of the APEC Summit in Korea and the influence of Free
Trade Agreements (FTA) on North Korea's Gaeseong Industry Complex.
Q: What is the significance of the APEC summit for the Republic of Korea, its host?
A: This APEC Summit meeting will serve to upgrade the status of brand, as it were, for the Republic of Korea in the
international community, as well as the perceptions of Korea held by its own citizens. Over 12 years have passed since
our GNP surpassed $10,000 per capita. If we were to think in terms of the seating in an airplane, Korea's position in
the world economy is equivalent to the very first row of the economy section. In order to move up to the first class
section, the ROK needs to implement economic reforms with an eye to opening up economy. Doing so will enhance the
nation's competitiveness in the world.
Q: Why do you think the ROK needs to further open up its economy to the world as part of its reforms?
A: Reform can disappear in a single day. To prevent an incident like that from happening, it is essential to bolster
reform efforts by opening the ROK market. Investment from foreign countries and the nation's global competativeness can
only be achieved through economic reforms. It is necessary to improve the ROK's current economic system and create job
opportunities through FTA agreements that include the members of APEC.
Q: What is the impact of APEC for Korea?
A: APEC members make up 46% of the world's trade volume. Korea is one of the biggest beneficiaries from the world's
multilateral trade structure. Out of the 148 members of the World Trade Organization, the ROK is the only nation that
has advanced from a developing country to an advanced country. More importantly, Korea has evolved from a dictatorship
into democracy.
The ROK's industries have successfully established good relations with both developing and advanced countries and we
adeptly survived the IMF crisis in 1997. We also have a responsibility to transfer our advanced technologies to
developing nations while developing new fields of advanced technology at the same time. It is essential to lay out a
detailed plan-with both economic and political aspects-that strongly supports the DDA (DOHA Development Agenda) during
the APEC Summit.
Q: What is the government position on DDA?
A: It is necessary for the ROK government to actively pursue the Non-Agricultural Market Approach (NAMA) as well as
continue to export goods and services to both developing and advanced countries by a method of lowering high tariffs on
our main export items. It is noteworthy that our export market will increase by $10 billion while creating new jobs if
tariffs are reduced by 50%. One of the issues is how to effectively negotiate the opening of markets for agricultural
products. We have strongly presented our discontent with the issue of maximum tariffs, and it is a disappointment that
Korea still receives treatment as a developing country. Thus, we plan to address these issues in detail at the APEC
Summit.
Q: Do you predict that this summit will promote the DDA?
A: This year marks the mid-point of 'Bogor Declaration,' issued at a previous APEC Summit in Indonesia in November,
1994, which agreed on liberization of intra-regional trade and investment for the advanced countries by the year 2010,
and by 2020, for the developing countries. Since that time, tariffs among APEC members have decreased from 16.9% to
5.5%, meanwhile, direct investment between members has increased by five times. However, although the GDP of APEC
members has improved an average of 46% over the last seven years, that of non-APEC members have only gained about 36%.
Thus we need to lower the tariffs by seeking a compromise settlement of the DDA to carry out the 'DDA Action
Plan,'enforce transfers and cooperation among the industries, focus on deregulation and enforce protection of
intellectual property rights.
In addition to this agenda, the '3 Generations of FTA' must discuss the issues that were debated in the past meeting of
WTO.
Q: What impact does APEC have in areas other than economy and commerce?
A: The APEC is capable of cooperation and information exchange on global crisis such as the bird flu or terrorism. For
our part, it is essential to improve our brand recognition and the perception of our products and services abroad. As a
country which has been transformed from a developing nation to an advanced one, from a dictatorship to democracy, we
need to secure our leadership by providing such lessons and experiences to developing countries.
Q: We heard you recently visited the Gaeseong Industrial Complex? What was that experience like?
A: I felt that the reunification of North and South Korea is drawing closer when I visited Gasung. Products from the
Gaeseong Industrial Complex are 60 percent more affordable than equivalent products produced in Korea and 40 percent
cheaper than Chinese goods. If the Gaeseong products are acknowledged as products of the Republic of Korea in the
process of FTA negotiations, then we can export them to members without any tariffs. That is the reason why the FTA
decision will have a great impact on the complex.
Q: There have been arguments that the ROK has been too generous towards its investment in North Korea. What benefits
will the Gaeseong complex bring to South Korea's economy?
A: As of today, 15 companies are temporarily operating at the complex. Yet about 2,000 businesses are planning to move
in, meaning 700,000 people will be employed in Gaeseong in the future. If we include service sector companies, 200,000
to 300,000 more jobs will become available, extending to 3,000,000 people, if we include family members, the number
living in the complex area. The environment will be appealing to business investors as the monthly salary for workers
will total to $57.50, whereas it is $110 in China.
Q: Which countries have announced they will acknowledge Gaeseong's products as the ROK's?
A: The European Free Trade Association which includes Switzerland and Norway has agreed to this arrangement. The
Association of Southeast Asian Nations has also responded positively to the proposal. Thaksin Shinawatra, prime minister
of Thailand, promised to put this into consideration on his latest visit to the ROK and Megawati Sukarnputri, former
Indonesia president, is also deeply interested in Inter-Korean issues. Malaysia said the arrangement will be possible as
well. All countries evaluated the Gaeseong Industrial Complex's achievement as a positive step toward achieving peace
and reunification of the two Koreas. We have an important task of making North Korea a part of the international
society.
Q: How is North Korea reacting to the Asia-Pacific Economic Cooperation summit meeting that will be held on Nov. 18-19?
A: North Korea has not made any comments. Even if North Korea decides to attend the meeting, we have will have to
discuss the matter with other APEC members first.
Q: Is there a possibility that North Korea's nuclear program will come up in the discussions at the APEC summit meeting?
A: That is a hard question to answer as of now.
Q: It has been suggested that the ROK government plans to reduce the screen quota system. What can you say about this
proposal?
A: This is a matter that first needs to be discussed with the Ministry of Culture and Tourism.
Q: What is the government's position on reopening the Korean market for U.S. beef products?
A: Because the consumption of beef affects the health of our people, we feel that scientific proof of safety is
necessary to make a final decision. If consumers feel that beef products have sufficient assurance of safety for
purchase, then the government will be accepting. But first, we must carefully examine the evidence offered by the United
States.
Q: We heard that Canada expressed a desire to import beef to the Republic of Korea lately. Is that accurate?
A: Canada did not demand that the ROK ease import regulations, but rather wanted us to give them a chance to explain how
Canada examines and tracks the origin of agricultural products. The government is looking at the issue with a positive
attitude and we will arrange future meetings to discuss the matter after this process is complete.
Q: It seems like a great number of summit meetings between two individual countries will be arranged throughout the APEC
meeting. Which countries are involved and what are the topics of the summit meetings?
A: The ROK will conduct summit meetings with the U.S., China, Australia and all ASEAN nations. The topics for the
meetings with the ASEAN members will include what must be done to achieve a successful FTA negotiation at the EAS summit
meeting in December. If this plan is not approved, we cannot sign the FTA. Europe and the Untied States play an
important role for the ROK, but we cannot leave the ASEAN market out of the picture at this point.