Publisher: ISEAS Publishing, Singapore
Review by Antonio Fiori, Postdoctoral Research Fellow, University of Bologna, Italy
Free Trade Agreements (FTAs) are pacts stipulated between two or more countries aiming at removing trade barriers and facilitating investments. There are several examples of FTAs, witnessing the proliferation of this instrument. In this sense, the incipit of this book, stating that “FTAs are viewed as superhighways that connect major economics and new markets,” is extremely true and actual.
The book focuses on the Korea-Singapore FTA (KSFTA), entered into force in 2006. The process that has led to the ratification of the FTA between these two countries has been relatively long, since it was first proposed in November 2000, when Kim Dae-Jung – President of the Republic of Korea at that time – visited Singapore and met the Prime Minister Goh Chok-Tong. This first step was followed, two years later, by the establishment of a joint study group in charge of investigating the feasibility of the FTA itself. After a few meetings, the joint group submitted a final report in October 2003. On the base of this report, negotiations for the KSFTA were launched in January 2004 between the governments of the two countries. The launch of negotiations followed the signing of the Declaration of Intent, on 23 October 2003, between George Yeo, then Singaporean Minister for Trade and Industry, and Hwang Doo-Yun, then Korean Minister for Trade. After a total of seven rounds of negotiations, the Heads of State of both countries declared the conclusion at the ASEAN+3 Summit held in Vientian (Laos) on 29 November 2004. The KSFTA was consecutively signed by the Singaporean Minister for Trade and Industry, Lim Hng Kiang and the Korean Minister for Foreign Affairs and Trade, Ban Ki-Moon, on 4 August 2005. The KSFTA, which had undergone less than a year of negotiations, was ready to be implemented. On 2 March 2006 Singapore’s bilateral FTA with the Republic of Korea came into force.
Beyond liberalizing trade in goods and services and facilitating trade, the main objectives of the KSFTA are: establishing a cooperative framework for strengthening economic relations, and setting up a framework for further regional and multilateral cooperation to expand and enhance the benefits of FTA throughout Asia, encouraging the economic integration of Asian economies. The areas covered by the FTA – and carefully examined in the book – are the following: trade in goods and services, investment, government procurement, Mutual Recognition Agreement (MRA), intellectual property rights, and cooperation.
The book is basically divided into two parts: the first part, composed by 39 pages constitutes the background and the analysis of the KSFTA, while the second part – the most part of the book with its 135 pages – is given by the text of the FTA itself. The book represent a conjunct effort by two researchers of the Institute of Southeast Asian Studies: one of the authors in particular, Ambassador K. Kesavapany, is the Director of the Institute and – above all – he has acted as Chief Negotiator of the KSFTA on the Singaporean side.
Apart from the appendix, which is absolutely worth reading in order to fully understand the complexity of the KSFTA and its significance for both the countries involved, the interesting section is without any doubts the first one, i.e. the background and the analysis of the KSFTA. In this section the two authors try to explain the rationale beyond the agreement and, above all, the significance for both Korean and Singaporean economies. In their opinion, the benefits determined by the KSFTA for Korea and Singapore are multiple and indisputable. First of all, the authors tend to underline the economic relevance of the agreement, stating how the implementation of the KSFTA would provide better market access for services in both countries. This would lead companies of both countries to take advantage of the insertion in a wider network, since Korean companies would benefit from Singapore’s network of FTAs, while Singaporean companies would have the great opportunity of investing also in Korea’s neighboring countries like Japan and China. In addition, the authors rightly highlight one of the unique feature in the KSFTA, concerning the fact that a “selected list of products exported through the Republic of Korea has been accorded preferential treatment, regardless of the place of production.” Despite the Appropriate Rules of Origin (ROO) – which means that “only ROK or Singaporean products enjoy the tariff preference negotiated under the Agreement” – the list of products includes goods to be produced in the Gaesong Industrial Complex, located in the Democratic People’s Republic of Korea. This is a relevant issue, since it could not only improve the economic development of North Korea, but also contribute to the enhancement of political relations between North and South Korea and between North Korea and Southeast Asian countries.
Beyond the analysis of economic factors, the book takes into account the significant political outcomes of the KSFTA. In this sense, the authors emphasize the fact that through the ratification of the Agreement, Korean companies “use” Singapore as a “diving board” toward the Asean community and its huge market, while Singapore looks at Korea as a “fast track” for the access to Northeast Asian economies. In addition, being Korea and Singapore both members of important multilateral trade and economic organizations such as the WTO, the KSFTA would serve as a tool for the realization of a wider trade liberalization process and, more important, for the evolution of regional integration in Asia.
In conclusion, the book is highly recommended for both those who wish to analyze the KSFTA in detail, and also for those who do not have any particular knowledge of trade agreements. In particular, those who are less experienced in Free Trade Agreements will have the opportunity to go into the problem in more depth and have a brilliant case study to analyze