Korean FTAs in Effect
The Korea–Singapore Free Trade Agreement (FTA) went into effect on March 01, 2006.
While the Korea–Chile FTA was meaningful as it secured a hub in long-distance trades across the Pacific Ocean, the Korea–Singapore FTA can be considered as a prelude announcing our major pursuits of free trade with our neighboring countries in East Asia.
1. Significance of the Agreement
- Strategic linkage with an international business hub (an opportunity for advancing the economic system as well as strengthening our competitiveness and expanding our investments in the service sector).
- An FTA connecting the hubs in Northeast Asia and Southeast Asia (strengthening the foundation to accelerate our advancement into Southeast Asia by connecting our economy to Singapore that is aiming to be a hub in the Northeast Asian economy).
- A comprehensive FTA expanding and facilitating bilateral trade and investment (adopting a free trade system that appropriately reflects our actual trade circumstances, separately from the trade liberalization under the WTO).
- Setting a precedent for finding an overseas market for the products from the Kaesong Industrial Complex (If the products are imported into Singapore via Korea, they will be recognized as goods of Korean origin, and preferential tariffs will be applied.)
2. Importance of the Singaporean Market
- Although Singapore is a small city-state, it is an economic powerhouse, with its GDP per capita reaching up to USD 43,116; GDP, up to USD 222.7 billion; and total trade, up to USD 23.09 billion, according to the 2010 IMF data.
- Singapore is the world’s second largest trading port, the world’s fourth largest foreign exchange market, one of the five international financial centers, one of the world’s three major petrochemical centers and East Asia’s leading business center.
- With its urban style, open economic system and foreign trade–dependent economic structure, Singapore has pursued active foreign trade policies and has concluded a number of FTAs with countries with which it has close economic ties to establish itself as an FTA hub.