They say FTA will kill all grape farmers… Korea has become ‘the country of luxury Shine Muscat’

In 2004, when Korea’s first FTA (free trade agreement), the Korea-Chile FTA, went into effect, grapes were a ‘hot potato’. When grapes, one of Korea’s five most consumed fruits, were included in the tariff elimination list, grape farmers said, ‘We are done now.’ Grape production, which was 376,000 tons in 2003, decreased to 330,000 tons in 2006 as Chilean grapes flooded into the domestic market. But it didn’t end like this. In 2006, our farm imported ‘Shine Muscat’ seedlings from Japan and began improving them, and began exporting them to China in 2017. Grape exports, which were $1.88 million (about 2.6 billion won) in 2010, increased 24 times to $44.69 million last year. Now, Korean Shine Muscat is considered a luxury fruit in countries such as Singapore, Vietnam, Thailand, and Cambodia that have signed FTAs ​​with us. Grape farm income, which was 3.12 million won per 1,000 m2 per year in 2005, increased to 5.98 million won in 2020. The FTA, which was said to kill all grape farmers, increased income.

◇Catch up to 85% of Japan in 20 years

According to the Korea International Trade Association on the 23rd, Korea ranked 8th in the world in terms of trade volume and exports by country last year. The total trade volume of Korea’s exports and imports amounted to $1.2752 trillion (about 1,757 trillion won), which was 85% of Japan’s ($1.5028 trillion). In 2003, when Korea was just entering the FTA, Japan’s trade volume was 2.3 times that of ours, so the gap was so large. While Korea’s growth more than tripled, Japan’s growth, which was passive in FTAs, was not significant.

FTA was a winning move to expand our export market, which had entered a period of stagnation. In 1983, it ranked 12th in the world in terms of trade (exports + imports), and ranked 13th and 14th in exports and imports, respectively, entering the top 15, but for the next 20 years, none of the items reached single digits.

Even as China, which was growing rapidly, improved its ranking every year, we could not easily overcome the barrier of transit trade powerhouses such as the G7 (seven countries), the Netherlands, Belgium, and Hong Kong. Jo Soo-jeong, a professor at Korea University who worked at the Ministry of Foreign Affairs and Trade in 2003, said, “There was a sense of crisis that it would be difficult to enter the top 10 if things continued like this.”

Following Chile, FTAs ​​with Singapore and EFTA came into effect in 2006, and amid the trend of hyperglobalization, ASEAN (2007), India (2010), EU (2011), USA (2012), and China (2015) FTAs took effect in that order, and in 2017, trade (9th), exports (6th), and imports (9th) all ranked in the top 10, while per capita GDP (gross domestic product) also broke the $30,000 barrier.

◇Secured 85% of the world… It is the only agreement with the US, China, and the EU.

Starting with Chile, Korea has concluded 21 FTAs ​​with 59 countries, securing 85% of the world’s GDP as an ‘economic playground.’ It ranks second after Singapore (87.3%), an intermediate trade country. It also surpassed Chile (3rd place), which was considered an advanced FTA country.

Korea is also the only country that has concluded FTAs ​​with all major economic blocs, including the G2 (USA and China), the EU, and ASEAN. A trade expert said, “FTA negotiations are about taking some losses in each sector but achieving a win-win overall. Even though there was strong opposition to opening in the agricultural sector, we made concessions in the national interest and made a great contribution.”

Even as protectionism has recently expanded, FTAs ​​have become a strong support for our trade. The FTA network that has been tightly structured has become a conduit for trade in a situation where the WTO (World Trade Organization) system has virtually collapsed, and is allowing Korea to enjoy benefits as an FTA partner even when the United States is building barriers such as the IRA (Inflation Reduction Act). . Cho Sang-hyeon, director of the International Trade Research Institute of the Korea International Trade Association, said, “The rapid expansion of FTAs ​​in the past is shining in the current post-globalization phase.”