Talks on proposed Asean-Korean free trade area start

Negotiations for the proposed ASEAN-Korea Free Trade Agreement (AKFTA) has started with the first meeting of the ASEAN-Korea Trade Negotiating Committee last February in Jakarta, Indonesia.

The Philippines participated in the meeting, according to Trade and Industry Secretary Juan B. Santos.

The initial meeting follows the mandate of the ASEAN-Korea Summit last Nov. 30, 2004 in Vientiane, Lao People’s Democratic Republic to launch the negotiations in early 2005.

The staged approach, whereby certain areas like trade in goods would be negotiated and concluded in advance of other more sensitive areas such as services and investments, will be adopted for the AKFTA negotiations.

Negotiations for trade in goods will commence this year, followed by services and investments in 2006.

Separate agreements will be negotiated in each of the three areas.

For the current year, the deliverables include the finalization of the Framework Agreement on Comprehensive Economic Partnership between ASEAN and Korea, the Trade in Goods Agreement, Rules of Origin for the AKFTA and Agreement on Dispute Settlement Mechanism.

All these have to be completed in time for the ASEAN-Korea Summit in October 2005.

"The Framework Agreement on Comprehensive Economic Partnership serves as an enabling document to bind other Member Countries to other aspects of the FTA since negotiations will be undertaken on a staged approach, "Santos said.

The staged approach, Santos said, assures both sides that the outstanding issues would also be addressed after the first phase of the negotiations is completed.

The Trade in Goods Agreement will include the agreed modality for tariff reduction and elimination between ASEAN and Korea. An important element of the negotiations in trade in goods is the Rules of Origin that will provide specific guidelines on the determination of originating goods from ASEAN and Korea and whether these could be accorded preferential rates within the AKFTA.

Preferential origin rules must be developed to prevent third country imports from taking advantage of the concessions that were agreed upon by ASEAN and Korea in the AKFTA.

Rules with respect to the avoidance or settlement of disputes between ASEAN and Korea concerning their rights and obligations under the AKFTA will also be required with the substantive concessions on goods in place.

"Of all the ASEAN engagements, the ASEAN-Korea FTA is the most ambitious in the sense that 80 percent of tariffs will be at zero by 2009.

With this, the Philippines has to fast-track the work done usually in three years, at least based on the ASEAN-China FTA negotiations," DTI Senior Undersecretary Thomas Aquino said.

The Philippines will participate in the next round of negotiations scheduled in mid-April in Seoul, South Korea where the details of the agreements to be finalized before the scheduled ASEAN Summit will be discussed.

ASEAN member countries’ exports to South Korea increased by 156 percent from $6.125 million in 1993 to $15.702 million in 2002.