Prospects Bright for Korea-U.S. Economic Ties

Korea’s relations with the United States have been intertwined in a saga of love and hate since the tumultuous Cold War era in the 1940s that led to the Korean War in the early 1950s.

More than 60 years later, Korea and the United States have become important economic partners, providing mutual benefits to both countries.

Choi Jong-hyun, director general for bilateral trade at the Ministry of Foreign Affairs and Trade in Seoul, told The Korea Herald that the Korea-U.S. economic partnership will only “widen and deepen.”

“We are very important partners to each other for both political and economic reasons,” Choi said. Korea is Washington’s seventh-largest trading partner, while the United States is Korea’s second-largest single export market after China. The two-way trade totaled $83 billion in 2007, with Korea’s exports totaling $44.1 billion, up 5.9 percent from 2006, data from the Korea International Trade Association shows. U.S. imports totaled $36.2 billion, up 10 percent from 2006, according to KITA.

With the United States having been an important ally for Korea’s national security and economic prosperity, a free trade agreement, if ratified by both legislatures, is expected to mark the next milestone in their bilateral relations. “The major issue today in our bilateral relations is the FTA,” said Choi. The official said the trade agreement, aimed at facilitating movement of goods, services and professional workers, will help strengthen the economies of both countries.

Seoul and Washington hope to pass the bill within the end of this year, so the trade accord can take effect as soon as January 2008, Choi said.

Experts say the FTA is also an important strategy for strengthening the Korea-U.S. alliance.

Choi believes the partnership with the United States will only grow bigger not only because of the sheer size of the U.S. economy and its consumption capacity, but also for helping to advance Korea’s economic system and markets. Proponents of the FTA say opening up to the United States would bring in world-class services and help Asia’s fourth-largest economy advance by gaining know-how and international standards.

“This would definitely improve the country’s competitiveness,” Choi said. He mentioned that Korea can also gain from an FTA with the European Union.

Opening up with strategic partners can help improve the nation’s competitiveness on a broad scale, experts say.

This includes future-oriented industries like biotech and aerospace. Korea’s active efforts in the aerospace field, for instance, highlighted by the country’s first astronaut to participate in the International Space Station program, will also encourage cooperation with the United States, one of the most advanced nations in the field. The ISS is a joint project between the United States, Russia, Japan, Canada and 11 European countries, with construction to be completed in 2010.

Choi stressed that Korea can accelerate advancement in this important field through cooperative projects.

Another important issue in the Korea-U.S. relations is the visa waiver program, experts say. Seoul believes a visa waiver will help further facilitate business ties, boost economic opportunities, while encouraging more cultural and academic exchanges. Korean nationals already contribute significantly to the U.S. education market, as it ranks as the No. 1 ethnic group to enroll in overseas education programs there. Koreans are also one of the largest groups of foreign travelers to the world’s largest economy.

The visa waiver program would also help realize the three-point vision expressed by President Lee Myung-bak during his visit to New York on Tuesday.

Lee said Seoul and Washington have to pursue value, trust and peace-building in redesigning their future-oriented strategic alliance.

“On the basis of free democracy and market economy values, Korea and the U.S. should expand mutually beneficial relations to the military, politics, diplomacy, economy, society and culture to build an alliance of trust,” Lee said, speaking to members of the Korea Society at a hotel in New York.

At the event, Lee again stressed the urgency for Korean and U.S. legislative bodies to ratify the FTA. Lee also said that a visa waiver program agreement for Korean visitors to the U.S., which will be signed after his summit talks with U.S. President George W. Bush in Washington on Saturday, is expected to help boost bilateral practical cooperation. The waiver program will allow Koreans to enter and stay in the United States without visas for up to 90 days.

“The FTA is important also because it provides the framework for realizing our bilateral vision,” Choi said.