MercoPress. South Atlantic News Agency

South Korean Congress approves FTA with Chile

The South Korean parliament finally ratified this Monday by a wide margin the free-trade agreement with Chile that was signed in February 2003 and had been postponed three times because of violent protests from Korean farmers.

The South Korean parliament finally ratified this Monday by a wide margin the free-trade agreement with Chile that was signed in February 2003 and had been postponed three times because of violent protests from Korean farmers. The final open ballot vote was 162/71 with the ruling coalition favouring the treaty and opposition legislators from rural areas voting against.

"We value profoundly the support and commitment of South Korean authorities and private sector in the ratification of the free trade treaty with Chile, the first between Latinamerica and Asia", Chilean Deputy Foreign Secretary Cristián Barros said in Santiago on being informed of the result.

Taking into account the fact that the Chilean Congress ratified the treaty January 22, it will become effective thirty days after the exchange of written documents certifying legal proceedings on both sides.

According to the terms of the agreement Chilean exporters that currently are exposed to a 14% tariff for industrial goods and 50% for farm produce (some cases 100%) will be benefited with an immediate reduction of tariffs. Once the agreement is fully operational, 87% of goods traded will experience the elimination of tariffs.

For the South Koreans, Chile is the most open and fastest growing market of Latinamerica with ample opportunities for investing in agriculture, fisheries, forestry, mining.

Bilateral trade with South Korea during the first eleven months of 2003 reached 1,4 billion US dollars, a 33% jump over 2002, becoming Chile's sixth trading partner. Chilean exports reached 943 million US dollars, 43,4% increase, while imports from South Korea totalled 495 million US dollars, 13% over 2002.

In 2003 Asia proved the most dynamic trading partner for Chile almost doubling the average expansion of trade with other areas, 27% against 15,3%.

"The fact that we're the first to achieve a free trade agreement with South Korea gives us an important edge over those countries that have a similar productive and trade structure", underlined Mr. Barros.