Minister for Trade Dukgeun Ahn and Gulf Cooperation Council (GCC) Secretary General Jassim Mohammed Al-Budaiwi concluded and signed the joint statement for the Korea-GCC Free Trade Agreement (FTA) on December 28 in Seoul.
The Korea-GCC FTA is Korea’s 25th FTA (by concluded order), and the second FTA with an Arab country following the Korea-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) concluded in October.
Trade Minister Ahn assessed, “Alongside the CEPA concluded with the UAE in October, this FTA signed with GCC is a major catalyst for the spread of the ‘New Arab Spring’ and Korea’s cooperative relations with the Middle East have entered a new era,” and added that “starting next year, based on the expanding trade and investment with GCC as well as close cooperative ties, efforts will be concentrated on industrial, energy and resources cooperation with African nations adjacent to the Middle East to maximize the synergy between trade and industries and energy.”
Korea’s trade volume with the six member countries of the GCC amounted to approximately USD 102.6 billion in 2022. Korea imports mainly energy and resources like crude oil, LNG and aluminum from GCC and exports manufactured goods like automobiles, car parts, machinery and arms. The Korea-GCC FTA is anticipated to substantially contribute to diversifying export items to the region to include medical devices, cosmetics, agriculture, livestock and fishery products.
This FTA opens up the distribution of films and medical and dental services to major GCC nations, and the digital trade agreement on the rules for promoting e-commerce and cross-border data transfer has established the base for the greater expansion of Korean goods and companies into the GCC market. Moreover, the FTA will help facilitate Korean companies’ business operations by easing the terms for business immigration and visits, which has been a source of difficulty in Korean firms’ GCC market entry.
With respect to trade rules, the two sides agreed on the rules for intellectual property rights covering copyright, label and design, which is expected to function as a more effective trade remedy measure to respond against illegal distribution and misappropriation of K-content related products while protecting Korean companies’ intellectual property rights.
Notably, the Korea-GCC FTA has laid down an innovative and comprehensive economic cooperation system centered around 12 main areas through a separate economic cooperation chapter. Among the 12, separate annexes have been adopted for the following six areas, namely energy/resources, bio economy, advanced industries, smart farm, healthcare, and audiovisual services, containing detailed cooperation measures and are forecast to play a key role in strengthening the supply chain cooperation between Korea and the GCC countries.
Following the announcement of the FTA joint statement, the Korean government plans to undergo legal scrubbing and translation procedures to proceed with the formal signing within next year, then go through an economic impact evaluation and the National Assembly’s ratification agreement and other domestic procedures for the FTA’s earliest possible entry into force.
