07 May 2007

Revitalising Silk Road Trade

Global free tradeWhile negotiations over a global trade deal sponsored by the World Trade Organisation have stalled, South Korea has opened talks with the European Union, already their second largest trading partner after China, on a free trade deal that could boost their present £40 billion bilateral trade by as much as a quarter.

Forging ahead with bilateral deals of its own, the world's tenth largest economy and Asia's third largest economy, South Korea just last month completed a bilateral trade pact with America, their third largest partner. This comes on top of other recent deals with Chile, Singapore, and the ten-member Association of Southeast Asian Nations.

South Korea is seeking to increase exports to the EU of automobiles, textiles, electronics, movies, music, and access for South Korean professionals such as architects and nurses. However, whereas the United States and Chile put pressure on Seoul to open up its tightly defended agriculture sector, Brussels is expected to be more lenient in this area and will focus on the auto sector, which is also heavily protected by South Korea.

While it is right that we should remove global barriers to trade, such bilateral agreements should not be at the expense of the world's weaker economies and the Doha development round of negotiations. As I wrote some years ago in The Times, if the benefits of globalisation are to be extended to the citizens of the developing as well as the developed world, what we need is not a new set of regional trading blocs vying against each other, but a Global Free Trade Association.