Asean urged to liberalise bilateral trade

South Korean President Park Geun-hye this week called on Asean to liberalise bilateral trade further through its free-trade agreement (FTA) with Seoul to expand business opportunities for both sides.

Speaking at the CEO summit, part of the Asean-Korea Commemorative Summit in Busan, Park also stressed that the two sides should make more efforts to help small and medium enterprises to join the “global value chains” – international networks to optimise manufacturers’ production processes.

“Unfortunately, the utilisation rate of the Korea-Asean FTA among Korean businesses is roughly half the level seen in other FTAs. Actual levels of liberalisation are not high, and complicated rules of origin are the primary reason,” Park told the conference on Thursday. “I hope additional liberalisation measures and improved rules of origin will follow so that more businesses can take advantage of the benefits of the FTA. I ask for support from the business community so that the Korean and Asean governments will be able to begin additional negotiations without delay.”

The CEO summit was held under the main theme of “Innovation and Dynamism: A New Takeoff in Asean-ROK [Republic of Korea] Relations”. Some 400 government and business leaders and scholars attended the forum. 

Noting that Asean has been leading regional integration through bilateral FTAs and the proposed Regional Comprehensive Economic Partnership linking 16 nations in the Asia-Pacific region, Park reiterated that business opportunities must be expanded through further liberalisation of trade.

The Korea-Asean FTA took effect in 2007. The bilateral trade volume more than doubled to US$134.9 billion (Bt4.423 trillion) last year from $66.4 billion in 2006. But the FTA has not been actively used because of issues such as rules of origin. Introducing her government’s three-year economic innovation plan focusing on deregulation, Park vowed to improve the local business environment conducive to trade liberalisation.

“We are implementing an expanded ‘regulation guillotine’ scheme that eliminates key regulations hindering investment and job creation if relevant ministries fail to supply adequate justification for their continuation,” she said. “Most important, though, is that we hear the voices of all of you in the business sector, who confront such regulations every day. As those directly affected, you can communicate to us which areas require deregulation, and we will work actively to bring improvements.” During his opening address, Park Yong-maan, chairman of the Korea Chamber of Commerce and Industry, urged entrepreneurs in South Korea and Asean to work together to spur regional economic dynamism based on the bilateral FTA. 

“The efforts by Korea and Asean to look for ways to cooperate for mutual growth would become a driving force not only for Asia, but also for the world economy,” he said. 

“Armed with entrepreneurialism and innovation, businesspeople in Korea and Asean should find ways to boost economic dynamism and respond to the calls of our times.”