Korean Minister of State for Trade Hwang Doo-Yun will arrive in Israel on October 9 to open the discussions of the joint Israel-South Korea committee. He will also meet Prime Minister Ariel Sharon and Minister of Foreign Affairs Shimon Peres.
The Israel-South Korea committee meets once a year with the aim of consolidating financial cooperation between Israel and South Korea. Minister of Industry and Trade Dalia Itzik will head the Israeli delegation. The talks will last three days, and are intended to pave the way for the signing of a free trade agreement between Israel and South Korea.
While Israel has free trade agreements with some 30 countries, including the EU members and the USA, South Korea has not yet established such an agreement with any country, and only now is in advanced contact to that end with two countries: Chile and Israel. The governments of Israel and South Korea have not yet reached a final decision, but it is definitely possible that little Israel, for all that, will be the first free trade partner of the twelfth largest economy in the world.
In anticipation of the talks, "Globes" interviewed Korean Ambassador to Israel Yu Myung Hwan:
Globes: What is on the convention’s agenda, besides discussions on a free trade agreement?
Korean Ambassador to Israel Yu Myung Hwan: “Another goal is to facilitate and simplify trade between the countries by reaching an agreement on the joint acknowledgment of standards. That is to say, Israeli medical equipment companies desiring to export products to Korea, for example, will do so in accordance with standards that the countries will set, and thus will be more accessible to the local market. In addition, the countries will sign a marine cooperation agreement, and ways will be examined to increase the volume of commerce, which has a large potential for extension.”
What are the estimates with regard to trade between Israel and South Korea in the future, and what fields can be expected to expand?
“The volume of trade between the countries is almost a billion dollars this year. Undoubtedly, the signing of a free trade agreement will greatly accelerate the volume of trade. Israel currently imposes a 16% VAT on the import of merchandise from Korea, over and beyond the taxes levied on imports from countries with whom a free trade agreement exists. This makes all Korean products imported to Israel more expensive, and on its removal we will experience a leap in the volume of trade.
“It is important to emphasize that the economies of Israel and Korea are complementary, not competitive, and so there is no risk involved for the Israeli economy. On the contrary, cooperation will help growth. We expect the scope of trade to reach two billion dollars in five years time.”
Are there Korean companies that invest directly in Israel, and Israeli companies, in Korea?
“Yes, of course. The prominent example in Israel is the Israeli startup company, Radvision, which Samsung Electronics purchased in 2000 for 17 million dollars. On the other side, 11 Israeli companies have invested in Korea. The most outstanding example, ISCAR, purchased a firm in 1997 in the city of Taegu with the investment of 150 million dollars, and adapted it through sophisticated technology to manufacture iron-cutting machines with tungsten, a metal that is practically the sole natural resource in South Korea. The factory employs some 1,000 workers, and is very successful. Such investments should be encouraged.”
All the same, the volume of commerce between the countries declined in 2001 by about 20% compared to the peak year, 2000. Why?
“Well, the economic slump in Israel in particular and worldwide in general can not be ignored, but recovery seems fairly close. The Israeli economy has already proved a capacity to get out of crises in the past. Tourism from Korea is also on the rise, and is less affected than other countries. We are also working on the renewal of Korean Air’s direct flights between Seoul and Tel Aviv, which were stopped in 1997 following the crisis in eastern Asia.”
South Korea is a candidate to host Expo 2010. Voting will take place in two months time, and Israel is among the some 30 countries that will be voting.
“Yes, we are very very interested in receiving the hosting of this important international event, and hope to receive Israel’s vote. Minister Hwang, who will arrive in Tel Aviv next week, will ask Ariel Sharon for Israel’s support. The political pressure that the Chinese government is exerting in this matter is enormous. We have prepared a complete program to host Expo 2010 in Yeosu City, with an investment budget of 1,857 billion dollars. We have a special plan: to build an entirely new city for it, and to help develop the region. Our major competitors, Moscow and Shanghai, are large cities that have already been exposed to the world, and have nothing new to offer. On the contrary, there’s a lot of interest in us – and especially outside a big city, in a developing country.”
Prominent publicity has recently been given to the opening of a overland border between the Koreas, to the reconstruction of the railroad connecting the north and the south, and to the paving of a road. While optimism seems high, the situation is that the citizens of the two countries are strictly forbidden to cross the border, and even telephone talks and mail communication are prohibited. If so, what is the real significance of the move, is it merely symbolic?
“For our part, we welcome every move that will help ease the tension in the Korean peninsula. We are not sure whether North Korean president KimJung-Il has been dragged into doing this due to his desire to improve his relations with the USA, or whether he really wants to build a relationship. Each positive move helps improve the atmosphere and contributes to attracting foreign investment in Korea. In addition, the overland connection between the countries has an added significance: the linking of South Korea to the trans-Siberian railway, with the possibility of exporting merchandise to Europe through it. It seems North Korea has agreed to it, against payment of course.”
What is your estimate with regard to the possibility of a unification between North and South Korea?
“It is only a question of time, and in my opinion it is a matter of less than 10 years. When it happens, it will happen suddenly, like in Germany, and not gradually.”
What is the Korean government’s stand with regard to the possibility of war with Iraq? How is the Embassy in Tel Aviv preparing for it?
“Korea is against any totalitarian country that has weapons of mass destruction. South Korea is the USA’s ally, and shares a common interest with the Americans with regard to Iraq, also paying attention to the fact that Iraq and North Korea intend to develop weapons of mass destruction. It still does not say that Iraq should be attacked at all costs, and without consulting all the allies. A democratic country that has unconventional weapons does not represent a danger, but a dictatorship represents a great danger. We are also preparing ourselves here in the Embassy, and are apprehensive about the possibility of a regional flare-up.”
South Korea has good relations with the Arab world, but also has very close relations with the USA and Israel. Where does Korea stand with regard to the Israel-Palestine conflict, and is it possible that it would participate in the mediation efforts?
“South Korea is not an import player in the ring, and its geographical location makes it difficult to for it to make a real contribution in the Middle East. We want a peaceful solution, want the suicide attacks to stop, and negotiations to start. We envision a permanent agreement in the future that will enable the two peoples to live in peace and independence, through negotiation and not the use of force. South Korea has abstained from participating in most of the votes in the UN on the matter.”
Published by Globes [online] - www.globes.co.il - on 08 October 2002