Dear Richard,

This is my first post here, after lurking in the background for considerable time, but then this is perhaps the first topic on which I can say something meaningful.

The main reason why Korea can conclude more FTAs is very straightforward, but it's much less political than you would think. According to WTO rules (Art. 24 GATT 5. a)-c)), countries can sign FTAs (or any "regional trade agreement") provided they liberalize substantially all trade, in practice usually 90%, do not raise tariffs to non-member to a higher level than before without compensating them, and achieve liberalization over a reasonable length of time, in practice 10-15 years.

But there is an exception: the Enabling Clause, product of the 1979 Tokyo Round, allows developing countries to delay liberalization indefinitely and to exclude virtually all trade from their RTAs. That means that "sensitive" sectors such as agriculture can just be excluded from the deal.

Cleverly, Korea is classified as a developing country in the WTO. I suppose they once were one, but by now it primarily allows Korea to avoid liberalization.

Of Korea's FTAs, the following have been notified under the enabling clause:

ASEAN-Korea
Korea-India
Asia Pacific Trade Agreement ... aka APTA, which includes China

That covers a lot of Korean exports already, without any liberalization of agriculture.

So the puzzle then becomes why Korea could exclude agriculture in the FTAs negotiated under Art. 24 because they are with other developed economies:

Singapore -- no agricultural trade.
EU -- just as protectionist in agriculture.
EFTA -- ditto, especially Norway and Switzerland Chile
-- much more of a free trader than Korea, but with a different growing season. Also not much liberalization.
The Chilean agricultural producer association are very, very unhappy with the deal, but trade policy in Chile is almost completely insulated from domestic pressures.

Two negotiations are dragging on forever because of agriculture

Canada -- negotiations ongoing for five (!) years now Mexico -- ongoing negotiations since 2007

That leaves two questions:

1. Why could Korea pull off an FTA with the US?

2. Why don't the EU and the US negotiate FTAs with Japan?

On the first question, I'll need to look more closely at what's in the deal.

On the second question, I would think that the EU is very, very reluctant to sound the death knell of the WTO negotiations by sending the signal that it's not even needed for North-North liberalization.

--Mark

Dr Mark S MANGER
Lecturer in International Political Economy International Relations Department London School of Economics