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

2.  INTRODUCTION

This report analyzes the potential FTA between Chile and Korea, covering the trade of goods, mutual investments, and the trade in services. Critical background information needed to understand the depth of the negotiation is provided. In particular, the historical and cultural peculiarities of Korea will be pointed out as the most important aspects to consider during and after the negotiation process.

This report presents the current trade barriers for Chilean industries in Korea, and it establishes which industries are competitive and will get the most benefits from an FTA. The report also presents recommendations and conclusions.

Overall, extremely high tariffs—even import prohibition for some fruits—and various non-tariff barriers such as subsidies are exemplified as critical trade barriers. Simultaneously, the products for which these barriers are applied are the most competitive Chilean export products. It is recommended that eliminating those barriers should be carefully pursued, remaining cautious not to spoil the negotiation itself.

In the investment sector, the objective of the Chamber should be to induce more investment from Korea. The FTA is expected to promote investment in the industry sector, since Korea is strong in this area. For this, the Chamber has to make the Korean government lift its domestic regulations on foreign investment. However, priority should be given to the elimination of barriers for trade of goods, especially agricultural products, since most of the barriers to investment in Korea have already been lifted, and Korean domestic regulations are also being eased now.

Finally, with respect to services, tourism is expected to hold the most potential. However, to make it possible, the Chamber needs to advertise Chilean tourist goods and to dispatch representatives to Korea to familiarize Koreans with Chile and to mitigate nationalistic public opinion.

In general, the report shows that an FTA between Chile and Korea is beneficial for Chilean industries.

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Last updated: January 06, 2001. Copyright @ 2000 by GLOBAL Trade Consultants.