By Kang Yoon-seung
SEOUL, Oct. 10 (Yonhap) -- For South Korea, an open and small economy, selling goods overseas may be the most viable source of income, and that's why the country is ratcheting up efforts to expand or upgrade free trade agreements with more and more countries amid growing trade protectionism.
This year alone, Asia's fourth-largest economy has inked or implemented three new free trade agreements (FTAs), with seven more trade talks currently underway.
Seoul's move to seal more FTAs has gathered pace since last year as its top two trading partners -- the United States and China -- have been engaged in an unprecedented trade war. Their protracted trade row has dealt a hard blow to South Korea, leaving it suffering an extended slump in its outbound shipments.
In September, South Korea's exports sank 11.7 percent from a year earlier, extending their slump to a whopping 10th consecutive month. It marked the longest on-year skid of exports since the 19-month consecutive fall from January 2015 to July 2016.
Adding to the woes is the recently flared-up trade tussle between Seoul and Tokyo. The Asian neighbor's abrupt curbs on exporting key industrial materials, crucial for the production of chips and displays, served as a wake-up call for South Korea to further diversify its exports.
"It is unusual for countries such as South Korea to heavily depend on a few partners in trade," Kim Bong-chul, a professor of commerce at Hankuk University of Foreign Studies, said. "Even without such trade disputes, South Korea always needed to avoid putting all eggs in one basket."
Since its debut in 2017, the Moon Jae-in administration has been preaching the expansion of FTA territory and the diversification of overseas markets by forging or strengthening economic and political ties with emerging countries from the Southeast and the Central Asian regions, as well as with Russia and India, under its iconic New Southern and Northern policies.
"An FTA can work as a tool for South Korea in maintaining overall balance in trade. It serves as legal infrastructure that helps the country to ease its dependence on traditional partners," Kim added, claiming South Korea is on the right path to expand ties with more partners.
Starting this month, South Korea's FTA with Honduras and Nicaragua went into effect, as the first step of its comprehensive trade pact with five Central American countries. The FTA with the remaining countries -- Costa Rica, El Salvador and Panama -- will also go into effect after they complete remaining procedures.
In August, South Korea struck an free trade deal with Israel that is expected to take effect in the first half of 2020.
The FTA with tech-savvy Israel is especially significant as South Korea's trade row with Japan is poised to hurt the materials, parts and equipment industries of Asia's No. 4 economy.
"As Israel holds core technologies, the FTA will help South Korea to build ground in beefing up its materials, parts and equipment segments and improve its production technologies," Trade Minister Yoo Myung-hee said when the two countries announced the FTA.
In the same month, South Korea and Britain also inked an FTA that centers on maintaining benefits under the existing South Korea-EU FTA if London leaves the world's single largest economic bloc without agreeing on post-Brexit conditions.
While Britain takes up only a small slice of the country's outbound shipments, the deal helped ease uncertainties stemming from the so-called Brexit.
On top of the three fresh deals, South Korea currently plans to add at least eight more deals to its existing 16 sets of FTAs around the globe.
For one, Seoul is currently working to clinch FTAs with Indonesia, Malaysia and the Philippines by the end of the year in time for the South Korea-ASEAN summit slated for November.
Although Seoul also has a free trade agreement with ASEAN, the individual deals will help countries to meet specific needs, the ministry said. If all the negotiations underway are successful, South Korea will have free trade deals with all five of its top ASEAN trading partners.
"The economic gap among Southeast Asian countries is wide. Thus, the existing deal does not take different industrial structures of the members into consideration," Cheong Jae-wan, a principal researcher at the Korea Institute for International Economic Policy (KIEP), said.
"Currently, South Korea's trade with Vietnam is relatively higher than other Southeast Asian countries. The upcoming FTAs with other members will help Seoul to forge deeper ties with other countries in the region as well."
Seoul and Moscow also declared that they have begun discussions to sign a free trade agreement in the service and investment segments.
FTAs with regional blocks such as MERCOSUR, which covers Brazil, Argentina, Paraguay and Uruguay, and the Regional Comprehensive Economic Partnership (RCEP) that encompasses Asian and Oceanian countries are currently under negotiation as of October.
On top of the ongoing negotiations, South Korea began preliminary studies on seeking an FTA with Uzbekistan as well.
"By promoting the New Southern and Northern policies, South Korea is able to expand the FTA network and diversify its export portfolio to cover emerging markets," an official from the trade ministry said. "This will provide South Korean firms with more business opportunities."
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