This is the second article in a series of “Creative Korea Leadership – K-Trade” provided in partnership with Ministry of Trade, Industry and Energy.

SEOUL, KOREA - “How to tap into the ‘Economic freeway’ connected to 47 nations through FTAs is getting more instrumental for business success in the globalized era,” said Kim Young Hwan, Director General of the FTA Information & Business Center. 

Korea can now boast being a FTA hub nation having signed 9 FTAs that involves 47 countries. Asia’s fourth largest economy concluded FTAs with major global economic blocs including the US, EU, and ASEAN, and is now working to sign more trade agreements with countries like China and Japan.

However, despite the improved market access and increased global exposure, there are a slew of small and medium enterprises voicing complaints that their benefits haven’t lived up to expectations. Harnessing FTAs is still difficult for them due to different rules of origin and lack of relevant personnel. 

Take the automobile sector. Over 20,000 parts are necessary to make cars. To attest that the goods have been produced in Korea, companies have to verify each different part including the frame, engine, steering system, chair, airbag, and electronics. Some are made in Korea, others are abroad, and thousands of subcontractors are also involved. Even the verification of origin requires a multitude of standards and sub-standards. This makes it almost impossible for SMEs to resolve with their lack of manpower.

Last year, the Korean government set up the FTA Information & Business Support Center within Korea International Trade Association (KITA) to, in part, help struggling SMEs better utilize FTAs. Since its inception, the one-stop service center has carried out diverse support projects with the slogan “Until companies are fully satisfied”.

The center has run a FTA information website (okfta.or.kr) as well as a mobile system (m.okfta.or.kr) to provide integrated information. Through a bimonthly newsletter service, they are reporting FTA trends and analysis to over 100,000 members including exporters and relevant organizations.

“We are supporting the whole procedures for the utilization of FTAs. Any companies can ask us for help if they are struggling for certificates of origin due to lack of information and personnel,” Kim said.

The center has provided professional consulting services for companies having difficulties in verifying different rules of origin stemming from the spaghetti bowl effect - the outcome of proliferation of often overlapping bilateral and plurilateral free trade agreements. To this date, over 13,000 consulting services have been offered up until now.

On top of this, the center created the FTA post verification system on their website, and runs diverse FTA curriculum and programs ranging from basic theory to practical training through the FTA school.

Last month, the government opened the FTA call center (Dial 1380) within the FTA Information & Business Support Center as part of tailored support measure for SMEs.

“With one call, companies can have free consultation. Currently, 27 specialists are assigned to give consultation on the whole procedure of FTA utilization. We are also planning an on-site consulting system through which FTA specialists visit companies for the problems they can’t address by phone,” Kim said.

Today, exports account for nearly 60% of GDP in Korea, the highest level among OECD countries. Export has been the growth engine to Korea’s economic prosperity for the past few decades. “As the domestic market has already been saturated, more companies should tap into overseas market by taking advantage of FTAs. FTA Information & Business Support Center will step up its efforts to back SMEs to reap the full benefits of open market,” he said.

Shin Ji-hye (info@koreaittimes.com) 다른기사 보기