Korea already finished FTA negotiations with 45 countries including the U.S., EU, ASEAN and India. Korea also try to make a conclusion in some other FTA negotiations with Canada, Mexico, Colombia, Australia, New Zealand, and Turkey. Therefor remaining major economies scheduled to negotiate will be China, Japan, Russia, and Brazil. In the short run FTA negotiations with China and Japan will be started or resumed. FTA negotiations with Turkey started from 2010.
Some country's outcome of FTA negotiations may affect to following negotiations and it is important to analyse negotiation partners' previous cases. Major objectives of this study are to analyse Japan's outcome of previous FTA and provide information for resuming the negotiation with Japan.
Japan·Mexico EPA has low level of tariff elimination rates for agricultural products. Tariff elimanation rates are 48.9 percent for Japan and 57.1 percent for Mexico. TRQ concession has been widely introduced to compensate low tariff elimination level. Japan expanded market opening for agriculture in Japan·Chile FTA. Japan did not reserve fruits market protection in spite of Chile's high competitiveness. However, Japan did not concede most of grains and dairy products under the consideration. Japan further expanded agricultural market in Japan·Thailand EPA. Concession rates are increased and exception lists are significantly decreased. However, many major commodities are found on the exception list for high tariff items.
Rules of origin are key factors to achieve preferential trade agreements such as FTAs. Qualifications of originating goods can be divided into two categories; one is wholly obtained and the other is not wholly obtained, i.e. goods produced with imported materials. In the case of Japan, vegetable goods harvested in one country are treated as wholly obtained. In the case of Japan·Mexico FTA, live animals and animal products born and raised criterion is applied. Raised criterion is accepted in the case of Japan·Chile and Japan·Thailand FTA. Changes in tariff classification criterion is more widely applied than value added criterion for the goods produced with non-originating materials. For the criterion of changes in tariff classification, HS 2 digit level(chapter) is widely applied and HS 4 or 6 digit level is used as supplements. Regional value added of 30 to 55 percent is a minimum for the acceptance as originating goods. De minimis of 7 to 10 percent and bilateral cumulation are accepted in Japan's FTA.
Korea needs to keep a strict rules of origin for fresh agricultural products. Standards of planted and harvest for vegetable products and born and raised for animal products are strongly requested to be maintained as Korea's position. For the changes in tariff classification, HS 2 digit level will be better to protect fresh products while HS 4 to 6 digit level can be positively considered for processed food. Exceptions of de minimis application need to be introduced for agricultural products. Due restrictions on non tariff measures including embargo and subsidies also need to be included in FTA. Special treatments for agricultural products are requested in government procurement agreements.


Researchers: Sei-Kyun Choi, Myong-Keun Eor, Dae-Hee Chung
E-mail address: skchoi@krei.re.kr