Source: http://www.koreatimes.co.kr/www/news/biz/2010/08/123_72319.html 
By Kim Tae-gyu

Korea concluded a free trade agreement (FTA) with Peru Monday, which is expected to go into effect midway through next year after being approved by the parliaments of the two countries.

The Ministry of Foreign Affairs and Trade (MOFAT) said Tuesday that the agreement will boost their trade volumes, which rose over the past few years to $1.6 billion in 2009.

In a joint statement on the conclusion of the one-and-a-half year negotiations, the two parties said the comprehensive pact involving goods, services and investment would be mutually beneficial.

``We agreed that the Korea-Peru FTA, among its main benefits, creates an institutional framework and favorable climate for trade and investment between the parties, provides better market access through elimination of tariff and non-tariff measures, gives incentives to promote foreign direct investment, and includes instrumental provisions to enhance the welfare of both parties,’’ it said.

Under the agreement, Korea and Peru are required to scrap tariffs on most items in less than 10 years with the exception of 107 agricultural and marine products such as rice, beef, onion and garlic.

From the perspective of Asia’s fourth-largest economy, manufacturers of automobiles, electronic goods and home appliances are projected to chalk up the largest benefits from the pact.

Peru’s 9 percent tariffs on imported vehicles will be gone over the next decade as will those on white goods. The 9-percent tariff on color televisions will be jettisoned as soon as the FTA comes into effect.

``The Korea-Peru FTA will offer a sharpened competitive edge to Korean carmakers or producers of electronics goods,’’ said an official from the Korea International Trade Agency.

``In particular, it bodes well for Korea because it concluded the FTA with Peru ahead of its rival Japan, which is now in talks with Peru. We will be able to enjoy first-mover advantage.’’

In addition, Korean corporations are predicted to make brisker forays into various resources in Peru, which is abundant in such materials as gold, zinc, tin and copper.

This is the eighth FTA struck by Korea since the nation agreed its first with Chile in 2004. Currently, a total of five FTAs are running including those with ASEAN countries, India and Singapore.

It has also reached agreements with the United States and the European Union. When all the pacts are validated, more than a third of the country’s trade will be carried out with FTA partners.

Korea is also carrying out negotiations on FTAs with several other countries including Turkey and Colombia.