Korean FTAs in Effect
The Korea–Peru Free Trade Agreement (FTA) went into effect on August 01, 2011.
The Korea–Peru FTA, which was signed on March 21 and rectified by the National Assembly on June 29, went into effect. The Agreement, along with the Korea–Chile FTA that entered into effect in 2004, is predicted to contribute to expanding the foray for the South American market as well as strengthening bilateral resource cooperation and investment.
1. Significance of the Agreement
- Securing a bridgehead for the South American market: following the Korea–Chile FTA (2004), the Korea–Peru FTA is expected to contribute to expanding the foray for the South American market and strengthening bilateral resource cooperation and investments.
- Stable securing of resources: Peru is a resource-rich country, with the highest level of reserves in the world. The Agreement with Peru will have a positive impact on the negotiations with Columbia, which also has plenty of resources and will also stimulate MERCOSUR to move toward an FTA with us.
- Enhancing consumer benefits: the quality of life of people would be improved as the market basket prices are going to be lowered by cheaper Peruvian imports, particularly agricultural and marine products and textiles and as the Peruvian imports give wider choices to Korean consumers.
2. Importance of the Peruvian Market
- Peru is an open economy achieving stable growth. It has plenty of natural resources and is considered as a bridgehead for Central and South American markets.
- The country has a GDP of USD 152.8 billion, which is the world’s 50th highest (as of 2010, IMF), and has the highest level of reserves in the world (silver (ranked 1st in the size of the reserve), zinc (3rd), tin (3rd), gold (5th), and copper (3rd)).
- Despite the recent global financial crisis, Peru sustains its continuous growth based on the richness of its natural resources and maintains a stable government administration. The country will be established as our strategic partner for resource cooperation.
- Peru has a total population of 29 million and covers an area of about 1.29 million km2 (about six times than that of the Korean Peninsula). It maintains a high tariff of 9% on automobiles, TVs, medicines, etc., making the FTA potentially serve as a key element in our export competitiveness against Peru. In addition, as markets for construction, clean development mechanism and cosmetic surgery are expanding, exports of related items seem to be promising.