Both the United States and South Korea signed a historic Free Trade Agreement (FTA) early this year and the first of its kind between the US and Asia’s major economies. According to the agreement, within the next three years, all but five percent of tariffs imposed by both countries on their respective products will be cut. American small passenger cars to Korea will do so at free tariffs. American beef import tariffs will be stalled for a duration of 15 years. In return, among others, Korean textile exports will find their way to the US at a cheaper cost. Seen absent from FTA, and for a good reason, turns the problem into a sticky situation.
Dr. Sakong Il, founder and chair of the Institute for Global Economics (IGE), a non-profit think tank in Seoul offers his expert thoughts on the new FTA-US-Korea. Sakong expressed his thoughts on the FTA as one of the best things that can happen in order to have a sustainable economic growth. He continues by stating that the Korean economy will benefit greatly through its free access to the world’s largest market. What is more important, however, is that relations between Korea and the United States. The FTA will be able to provide a greater push in momentum for Korea to improve the overall economic system faster.
However, Sakong Il also addressed the strong opposing voice of the deal by stating that as the overall economic benefits will be substantial, some sectors do face the potential for short-term losses. For example, currently, about seven percent of Korea’s total population is involved in agriculture, accounting for only about three percent of the country’s annual GDP.
He ended the interview by stressing that is very important for the US to have a strong foothold in the region. As the FTAs can be such a foothold, the base on which the United States will be able to engage directly in economic and security cooperation activities in the region.