South Korea-US Agriculture Free Trade Agreement(FTA)'s And Impact On Korea's Agriculture

In observation of the recent world trading circumstance it has been noticed that the Regionalism centralized on Free Trade Agreement (transformed from the WTO system) has been accelerating its development. There were merely a few free trade agreements in early1990s but the total effective agreements by Dec. 2008 reported by WTO has reached 197. Looking at the 197 effective regional agreements chronologically there are 5 agreements signed before the 70s, 12 during the 70s, 10 only even during the 80s. However 64 agreements were signed in the 90s and 120 after year 2000. It is a vivid reflection of the extensive impact by regionalism. Especially after the WTO the number of regional trade agreements signed every year has been increasing rapidly. Take year 2007 as an example, more than 50% of the world trade volume is carried out under regional trade agreement. Currently, through negotiation of the contracted countries FTA has helped to achieve free trading based on market opening among courtiers and trade expansion. Countries around the world thus have shown a very active approach on this.Needless to say the developed regions like Europe, US and Japan the developing courtiers are participating in FTA signing actively. The South Korea government as well is highly promoting FTA for the purpose of sustaining the current export market, secure new trade partners, reinforce the economy system, etc. However FTA creates a huge hostility against the country, laborers and farmers and thus instability within the country.So far South Korea has signed South Korea-Chile FTA, South Korea-Singapore FTA, South Korea-EFTA FTA, South Korea-ASEAN FTA and South Korea-US FTA. Among these the one with US has become major topic in discussion in nowadays. The South Korea-US FTA becomes a dispute of the country in South Korea. The two countries struck compromise in 2007, 14 months after the formal announcement of the South Korea-US FTA. US is the largest export market in the world, the second largest trading country and the direct foreign investing country for South Korea. It's estimated that the signing of the FTA with US will heavily impact South Korea. Following factors can be used to justify the positive impacts on South Korea by this FTA: chances to guarantee the stability of the world's largest market, expansion of opening-up and application of international standards, the Northeast Asia commercial center strategy, FTA Hub of the Northeast Asia, impact on Japan by the further development of South Korea-US ties, economy of the ASEAN countries like China, South Korea's central role in Northeast Asia and the ASEAN countries. However it's a very dangerous idea to think that that all the hot topics in discussion will generate positive effects.The major issue during the FTA signing with US is South Korea's agriculture department. Since then the used to be heavily protected by the government agricultural products of South Korea becomes the hot topic in the country. It's both an opportunity to open the domestic market to enter the new market and a critical and a crucial period for the domestic agricultural products of South Korea to enter the major capital agricultural market of US.At present South Korea is enjoying large scale of favorable balance from the trading with US except for the chronic unfavorable balance in agriculture. Compared with US, world's export market for agricultural products, the weak agricultural industry of South Korea will be heavily impacted. Its agricultural industry has been under a very weak position suffering from hard production conditions like expensive land and high labor cost due to the inadequacy of agricultural resources. In the meantime US has rich agricultural resources with highly competitive products in the world. Therefore the FTA with US will bring huge negative impact on South Korea's agriculture as well as impacts like decrease of agricultural production value, income and increase of the production cost during the execution of UR agreement on agricultural products. No doubt, FTA signing with a large agricultural country like US poses a tremendous challenge to South Korea's agriculture.By 2007 the export volume of products on agriculture, forestry and stockbreeding from South Korea to US is US$25 millions while the import from US to Korea is US$3.5 billions, 14 times of the imported amount vs. the exported with 3.3 billions US$ of unfavorable balance. This shows the degree of South Korea's reliability on US'agricultural products. Compared with decrease of market share of US the one for China has been increasing. Up to now US has a bigger share in South Korea's agricultural market than China. However looking into the details people will find out that China's market share of the agricultural products in South Korea will expand and eventually overrun US. The South Korea-US FTA will consider such situation from the US perspective.It's a fact that South Korea's agriculture is heavily impacted on its already very weak industry and the penetration of the competitive American agricultural products which has huge advantage in price by comparison of conditions, production and trading in agriculture of the two countries. This put South Korea's agricultural department into prodigious difficulties. To overcome these difficulties it's necessary for South Korea to minimize the negative impact and work out a thorough countermeasure domestically considering the sensitivity of its agricultural industry. Departments that suffer from the extension of the FTA should be compensated reasonably and supporting policies to improve production condition and competitiveness shall be sought. On the other hand, more efforts are needed on the export of the agricultural products. It's also pressing to develop the rural area in order to maintain multilateral skills. Very possibly agriculture and country will become the effective means to guarantee multiple competitiveness other than the production activity.FTA will not only bring danger but also more chances to South Korea's agriculture should people could improve the competitiveness of agriculture internally by comprehensive analysis of the issues and countermeasure, to expand the long term potential to sustain its competitiveness home and abroad and to correspond to the South Korea-US FTA with a system coordinated by both the government and its people.