REPORT INDEX

1. EXECUTIVE SUMMARY
2. INTRODUCTION
3. BACKGROUND KNOWLEDGE
4. TARIFF BARRIERS
5. NON-TARIFF BARRIERS
6. INVESTMENTS
7. TRADE IN SERVICES
8. CONCLUSIONS
9. LIST OF TABLES

GLOBAL TEAM

1.  EXECUTIVE SUMMARY

A Free Trade Agreement (FTA) between Chile and Korea will create not only quantitative but also qualitative competitiveness for Chilean industries. Quantitatively, it will lead them to a new major market, Asia. Qualitatively, it will endow Chile with the title of “the first Latin American country to trade freely with an Asian country”, which will improve its negotiation power in the MERCOSUR, in the WTO, and in future negotiations with other countries.

On the other hand, Korea’s benefit from an FTA will be relatively smaller than Chile’s, considering the scale of its economy. Korea is more or less passive with regard to the negotiation, since Korea thinks of it as an experimental trial. In this sense, Korea will not risk an FTA if the political circumstances are not favorable to it. The Chamber of Commerce, thus, has to persuade the Chilean government into taking the measures necessary for making a favorable political mood in Korea. This is especially true when taking into account the current difficulties  both sides are facing now in negotiations; e.g. the third negotiation schedule was once postponed due to discrepancies on the concession plan of agricultural products.

The following are more concrete measures the Chamber of Commerce can take:

• To advise the Chilean government to agree on less beneficial concession plans on investment and trade in services to achieve more concessions on strategic industries, such as agriculture, fishery, and forestry.

• To advise the Chilean government to suggest gradual opening tariff schedule on agricultural products and other measures to ease the Korean government of political burden.

• To take cultural approaches, i.e. considering that Korea’s culture is very different. Examples would be advertisements in Korea or tourist events to make Koreans feel familiar with Chile and its commodities.

• To dispatch negotiation team to meet also with Korean Farmers’ Association and Customers’ Association.

A Chile-Korea FTA will be a concrete step towards the globalization process that Chile promotes. It also will present an important opportunity for Chilean industries, which will be exposed to a large new market, and it also will provide the challenge of competing in a completely different culture.

For problems or questions regarding the content of this web-page or any other issue, you can contact any member of the Global Team.
Last updated: January 06, 2001. Copyright @ 2000 by GLOBAL Trade Consultants.