Research Reports
A Basic Study on ASEAN Agricultural Sector In Connection With the Upcoming FTA Negotiations between Korea and ASEAN
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AuthorKwon, Ohbok
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Publication Date2004.12.01
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Original
ABSTRACT
A Basic Study on ASEAN Agricultural Sector In Connection With the Upcoming FTA Negotiations between Korea and ASEAN
The purpose of this study is to take a look at the agricultural sector of the Association of Southeast Asian Nations or ASEAN before the negotiations regarding the Free Trade Agreement (FTA) will commence between Korea and ASEAN in early 2005. This study consists of nine Chapters: Introduction, Development of ASEAN, ASEAN's FTA negotiations with Non-ASEAN Countries, Economic Trends of ASEAN Countries, Agricultural Situations, Agricultural Trade, Tariff System applied to Agricultural Products, and Conclusion.
ASEAN is on track to create a free trade zone within ASEAN through the ASEAN Free Trade Area (AFTA) scheme. Under AFTA, the Common Effective Preferential Tariff (CEPT) has been applied to all member states. Most tariffs will be eliminated or reduced by 2010 in six ASEAN members (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand). The tariff rates applied to recently joined ASEAN Member States will be eliminated by 2015. ASEAN members can opt to exclude some products from the CEPT in one of the three following cases: i) Temporary exclusions; ii) Sensitive agricultural products, and iii) General exceptions.
ASEAN has signed an FTA with China in November 2004. According to the FTA, most tariffs will be reduced or eliminated by 2010 in six ASEAN countries and by 2015 in the newer Member States. To accelerate the FTA negotiation, China offered the Early Harvest Programme under which tariffs for some agricultural products will be reduced to 0% before January 1, 2006 in six ASEAN countries and before January 1, 2010 in the newer ASEAN Member States. Currently, ASEAN is also in talks with India, Japan, and Korea respectively regarding the signing of an FTA.
Some Korean agricultural products will be affected by the FTA with ASEAN if it is entered into. Among grains, rice and cassava will be negatively affected by the FTA due to cheap imports from ASEAN countries, including Thailand and Vietnam. Korean domestic fruits consumption would be decreased to some degree as the tropical fruits including banana, pineapple, and mango will be imported from ASEAN. In addition to this, peppers and onions, which are sensitive products, will be negatively affected by the FTA with ASEAN as well.
Further study will be needed to make more accurate assessment on the effects of the FTA between Korea and ASEAN, and draw up domestic strategies to deal with such negative consequences. Next time, it is necessary to put a more focus on sensitive agricultural products.
Researchers: Oh-Bok Kwon, Sei-Kyun Choi and Joo-Nyung Heo
E-mail address: obkwon@krei.re.kr
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