Preferential Trade Agreement (PTA) between South Korea and other countries have become more popular in recent years. This type of agreement reduces trade barriers, such as tariffs and quotas, between the signatory countries. The South Korean government has also been an active participant in negotiating PTAs with other countries, including the United States, Canada, and China. In this article, we’ll delve deeper into the Preferential Trade Agreement between South Korea and other countries.

What is a Preferential Trade Agreement?

Preferential Trade Agreement (PTA) is a reciprocal trade agreement between two or more countries that reduce or eliminate tariffs on selected goods and services. This type of agreement aims at promoting trade between nations and the facilitation of investments, without requiring the same level of commitment as free trade agreements (FTAs). The benefits of PTA include the possibility of increased exports, reduced import costs, and the diversification of trading partners.

South Korea’s Preferential Trade Agreements

South Korea has negotiated various PTAs with different countries around the world. Among the most significant are the Korea-US Free Trade Agreement (KORUS FTA), the Korea-EU Free Trade Agreement (Korea-EU FTA), and the China-South Korea Free Trade Agreement (CKFTA). In 2019, South Korea also signed a free trade agreement with Mercosur, a trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay.

The KORUS FTA, which came into effect in 2012, aims to benefit both countries by expanding trade, promoting investment, and creating job opportunities. The agreement covers a wide range of sectors, including agriculture, automotive, textiles, and intellectual property. Since the implementation of KORUS FTA, South Korea has seen an increase in exports to the United States.

The Korea-EU FTA is the EU’s largest free trade agreement to date, covering almost all sectors. The agreement benefits both parties as European companies gain access to the Korean market, while South Korean companies can export their goods and services tariff-free to European countries. Since the implementation of this agreement in 2011, trade between South Korea and the EU has increased significantly.

The CKFTA was implemented in 2015, and it is China’s first free trade agreement with a developed country. The agreement aims to increase bilateral trade and expand cooperation in various areas, including investment, intellectual property, and e-commerce. Since the implementation of CKFTA, South Korea`s exports to China have increased, mainly in the automotive and electronics sectors.

Conclusion

South Korea’s PTAs have been successful in promoting trade, boosting economic growth, and creating jobs. The country’s participation in various PTAs has allowed South Korean businesses to expand their market reach and increase their export volumes. The PTAs have also encouraged foreign investment in the country, creating job opportunities and spurring economic development.

In conclusion, preferential trade agreements have become an essential tool for promoting trade between countries and have benefited both South Korea and its trade partners. The country`s active participation in PTAs has helped support economic growth and diversify its trading partners. It has also provided an opportunity for South Korean businesses to expand their market reach and increase their competitiveness in the global market.