Korea backs US economic framework for Indo-Pacific

South Korea‘s trade minister and businesses on Tuesday voiced their support for the new US economic framework for the Indo-Pacific, saying that the 10-year-old bilateral trade agreement between the two countries should be the foundation for the new economic order.

At an occasion held to celebrate the 10th anniversary of the Korea-US FTA on Tuesday in Washington, D.C., Woo Tae-hee, executive vice chairman of the Korea Chamber of Commerce and Industry said the free trade agreement should contribute in setting up a “normative order” in the process of restructuring global supply chain centering on the US.

“KORUS FTA, as the first FTA the US had signed with an Asian country, has served as a global trade standard for the past 10 years,” said Woo. “Amid various uncertainties including growing trade dispute between the US and China, sanctions on Russia, and unstable supply chain, KORUS FTA must be able to be the norm for the restructuring global supply chain centered around the US.”

South Korean Trade Minister Yeo Han-koo said at a separate event that the country welcomes the new US economic framework for the Indo-Pacific, calling it a “good platform” to further expand their economic cooperation.

“The Indo-Pacific Economic Framework (IPEF) that the US is currently developing as a new cooperation framework in the region serves as a good platform for our two countries to build on the successful experiences of the last 10 years of the KORUS FTA,” Yeo said.

Meanwhile, US Trade Representative Katherine Tai said the US will focus on expanding exports of its vehicles and agricultural products to Korea.

The US’ agricultural produce shipments to South Korea increased 35 percent in the past 10 years, and South Korea is the biggest buyer of US beef products. But there seems to be further room for the US‘ agricultural export, she said.

There was “much further to go” to increase auto export opportunities, she added. South Korea was the fifth-largest market for US vehicles.

Celebrating the 10th anniversary of the KORUS FTA, Posco America President and CEO Henry Do also pointed out that through the free trade agreement, the size of the steel and related industrial markets grew, and the automobile industries of both countries were able to develop significantly.

“KORUS FTA helped increase car exports to the US from $8.8 billion in 2011 to $17.2 billion in 2021 which is a 96 percent increase, and at the same time, it increased exports of car components during the same period from $5.2 billion to $6.9 billion, a 33 percent increase,” said Do at the session jointly by the KCCI and US Chamber of Commerce.

Lotte Chemical Senior Managing Director Son Tae-woon said the company had chosen to make manufacturing plants in the US to nurture the company as a global petrochemical company and that KORUS FTA helped the process.

“We have become an exemplary case for having created jobs and contributed to the flourishing local economy through direct investment,” said Son.

“KORUS FTA has endured a lot of challenges during the past 10 years. We hope it continues to allow investment, industrial cooperation, and consumer benefits to flourish,” said an official from KCCI.

By Hong Yoo (yoohong@heraldcorp.com)