Korea, Japan start joint study on FTA

Korea and Japan decided to focus on information technology, science technology and education as starting points for their free trade agreement (FTA) project at the first meeting of the "Korea-Japan FTA Joint Study Group" held July 9-10 in Seoul.

The participants at the first official government-level meeting held specifically for the Korea-Japan FTA settled on high-tech sectors, so as to speed up cooperation with the intention of penetrating third-country markets with new technologies and products.

"We are looking specifically at finding ways to transfer technology through investments. To this end, we will launch joint studies and joint measures for advancing our cooperation in all areas, including investment and technology/human resources trade," the Ministry of Foreign Affairs and Trade said during a press briefing yesterday.

The two groups also agreed to look into eliminating tax and non-tax barriers, mutually liberalizing the investment and service sectors, standardizing technology between the two markets and producing in-depth reports on the forecast impact of the Korea-Japan FTA.

"One of the most significant aspects of this meeting was the sincerity of the Japanese participants. There were 38 officials present on their side from 11 ministries, research institutes and businesses," the ministry said.

The second meeting is scheduled for Oct. 1-2 in Tokyo.

The first joint study meeting was launched following the agreement between Korea's President Kim Dae-jung and Japanese Prime Minister Junichiro Koizumi who decided to expand economic cooperation to build on their successful co-hosting of the World Cup.

The agreement between the two neighbors would make for a vast free trade zone, incorporating a population of 170 million and accounting for about 14 percent of the world's total gross domestic product.

South Korea and Japan are close economic partners, with two-way trade volume reaching $43.1 billion in 2001. Japan is South Korea's second-largest trading partner.

Meanwhile, the ministry said that the Japanese leaders showed deep concern about the labor situation in Korea, which could hurt Japanese investments should the Korea-Japan FTA be realized.

"They voiced worry that a couple of bad instances would be enough to scare away other investors. As we are looking to form an FTA that would bring about concrete economic effects, we will have to look closely into this issue," the ministry said.

Korea and Japan signed a business investment treaty (BIT) in December of last year.