[FTA HONG] Summary of Republic of Korea's FTAs (what they mean, countries in force, WTO vs. FTA, etc.)
Free trade agreements (FTAs) are agreements between countries that grant each other exclusive trade preferences by removing tariffs and trade barriers to trade in goods and services. FTAs are often referred to as regional trade agreements (RTAs) because they have historically centered on neighboring countries or a specific geographic region, such as the European Union (EU) or the United States-Mexico-Canada Agreement (USMCA).
As of May 2023, South Korea has 21 FTAs with 59 countries.
Most FTAs have similar regulations, but agreement-specific application and interpretation is required to proceed.
Regionalism, as represented by free trade agreements, is becoming a distinct tide that characterizes today's international economy along with globalization, and has only increased since the launch of the WTO.
Here's why FTAs are becoming more prevalent
1. Reaction to the lengthy process of WTO multilateral agreements and the difficulty of reaching consensus due to the rapid growth in membership.
2. FTAs have emerged as an important reform measure in the trade sector in that they contribute to productivity gains by increasing competition through openness.
3. Growing recognition that trade and FDI(Foreign Direct Investment) inflows are drivers of economic growth, and lessons from cases where FTAs have helped attract FDI (e.g., Mexico after NAFTA).
4. Consider the aspect that exclusive reciprocal measures between certain countries may be beneficial to increase profitability, ease burdens, and reflect interests.
5. Need to address the reflexive damage of being an offshore country as regionalism spreads
| Classification | GATT (1948 ~ 1994) | WTO (1995 ~ 2000) | FTA (2000 ~ ) |
|---|---|---|---|
| Main Purpose | Multilateral tariff cuts boost international trade | Eliminate multilateral tariff and non-tariff barriers | Periodic, significant reductions in tariffs and non-tariff barriers between like-minded countries under the WTO system. |
| Legal entity status | Operate as a consortium with no legal structure | An international organization with legal personality headquartered in Switzerland (Geneva) | Operated in consultation with the relevant ministries of the parties to the agreement |
| the main target | Mainly industrial products | Expanded to include industrial products, agricultural products, services, intellectual property, government procurement, environment, labor, norms, etc. | Focus on basics such as industrial products, agricultural products, services, and intellectual property rights, and avoid controversial areas such as the environment and labor. |
| Basic principles | The principle of most-favored-nation treatment & National treatment principle | The principle of most-favored-nation treatment & National treatment principle | Allow exceptions to the most-favored-nation rule & Balance mutual benefits / respect for privacy |
| Trade remedies | Allow Safeguard | Allow Safeguard & Imposing antidumping and countervailing duties | Allow Safeguard & Imposing antidumping and countervailing duties & Verification of origin by customs authorities |
Republic of Korea's FTA status is as follows:
| The other party | Progress | Significance | ||
|---|---|---|---|---|
| Start a negotiation | Signature | into force | ||
 Chile | 1999.12 | 2003.02 | 2004.04 | The first free trade agreement, a bridgehead for Latin American markets |
 Singapore | 2004.01 | 2005.08 | 2006.03 | ASEAN market bridgehead |
 EFTA(4 countries) | 2005.01 | 2005.12 | 2006.09 | European market bridgeheads |
 ASEAN(10 countries) | 2005.02 | 2006.08 ( AGREEMENT ON TRADE IN GOODS) | 2007.06 ( AGREEMENT ON TRADE IN GOODS) | First FTA with a mega-economy |
| 2007.11 (AGREEMENT ON TRADE IN SERVICES) | 2009.05 (AGREEMENT ON TRADE IN SERVICES) | |||
| 2009.06 (AGREEMENT ON INVESTMENT) | 2009.09 (AGREEMENT ON INVESTMENT) | |||
 India | 2006.03 | 2009.08 | 2010.01 | BRICs countries, large markets |
 EU(27 countries) | 2007.05 | 2010.10.06. | 2011.07.01. (Tentative) 2015.12.13. (Entirely) | Large advanced economies |
 Peru | 2009.03 | 2011.03.21. | 2011.08.01. | Large advanced economies |
 USA | 2006.06 | 2007.06 | 2012.03.15 | World's largest economies(by GDP) |
| 2018.01 (Negotiate revisions) | 2018.09.24. (Negotiate revisions) | 2019.01.01. (Revised Protocol) | ||
 Turkiye | 2010.04 | 2012.08.01. (FRAMEWORK AGREEMENT ·AGREEMENT ON TRADE IN GOODS) | 2013.05.01. (FRAMEWORK AGREEMENT ·AGREEMENT ON TRADE IN GOODS) | Europe-Central Asia Bridgehead |
| 2015.05.26. (AGREEMENT ON TRADE IN SERVICES·AGREEMENT ON INVESTMENT) | 2018.08.01. (AGREEMENT ON TRADE IN SERVICES·AGREEMENT ON INVESTMENT) | |||
 Australia | 2009.05 | 2014.04.08. | 2014.12.12. | Ministry of Natural Resources, Oceania Key Markets |
 Canada | 2005.07 | 2014.09.22. | 2015.01.01. | North America Developed Markets |
 China | 2012.05 | 2015.06.01. | 2015.12.20. | Korea's #1 Trade Destination (as of '22) |
 New Zealand | 2009.06 | 2015.03.23. | 2015.12.20. | Key Markets in Oceania |
 Vietnam | 2012.08 | 2015.05.05. | 2015.12.20. | Korea's 5th largest investment destination (as of '19) |
 Colomblia | 2009.12 | 2013.02.21. | 2016.07.15. | Resource-rich countries, emerging markets in Latin America |
 CENTRAL AMERICA(5 countries) | 2015.06 | 2018.02.21. | 2021.03.01. | Creating a new market in Central America |
 THE UNITED KINGDOM | 2017.02 | 2019.08.22. | 2021.01.01. | After Brexit, Continuing the KR-UK trade relationship |
 RCEP | 2012.11 | 2020.11.25 | 2022.2.1 | Contributing to East Asian Economic Integration |
 Israel | 2016.05 | 2021.05.12 | 2022.12.01 | Startup Country Growth Model |
 Cambodia | 2020.07 | 2021.10.26 | 2022.12.01 | Expanding into the Southeast Asian market |
 Indonesia | 2019.02 | 2020.12.18 | 2023.01.01 | Helped expand our presence in Southeast Asia |
- EFTA : Switzerland, Norway, Iceland, Liechtenstein
- ASEAN : Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Vietnam, Thailand
- EU : Austria, Belgium, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Bulgaria, Romania, and Croatia.
- Central America : Panama, Costa Rica, Honduras, El Salvador, Nicaragua
- RCEP : Korea, ASEAN 10( Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Vietnam, Thailand), China, Japan, Australia, New Zealand
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