Economic Territory

Foreign Minister Ban Ki-moon (fourth from left), FKI Chairman Kang Shin-ho (third from left), and Chilean Ambassador Pernando Shumit (fourth from right) toast with wine to celebrate the Korea-Chile FTA in Seoul on April 4, 2004.
Foreign Minister Ban Ki-moon (fourth from left), FKI Chairman Kang Shin-ho (third from left), and Chilean Ambassador Pernando Shumit (fourth from right) toast with wine to celebrate the Korea-Chile FTA in Seoul on April 4, 2004.

 

South Korea ranks third in the world as of now in terms of its “Free Trade Agreement Economic Territory” following Chile and Mexico. The term Free Trade Agreement (FTA) Economic Territory refers to the combined Gross Domestic Product (GDP) of all partner countries with which one country has made FTAs.

The combined GDP of Korea’s FTA partner nations as of 2012 reached US$40.3 trillion, or 57.5 percent of the world’s total GDP (US$69.9 trillion based on the data of the International Monetary Fund). Chile now has the world’s largest FTA Economic Territory at 78.5 percent through FTAs with the US, China, and Japan. Mexico is next, with 64.1 percent. Japan’s economic territory portion is now only 17 percent.

If the virtually-concluded FTA with Australia and the coming FTAs with Canada and China are added, Korea will take the number one position in the size of its FTA Economic Territory. The conclusion of the FTA with Canada is also nearing.

According to Korea’s Trade Ministry on December 11, the nation concluded FTAs with 46 countries, including 26 EU member countries and 10 ASEAN members, so far starting from the Korea-Chile FTA in 2004.

If Australia’s US$1.5 trillion GDP and Canada’s US$1.8 trillion GDP are added, Korea’s economic territory will jump to 62.5 percent. Further, if Korea reaches an FTA with China, the world’s second largest economy, its FTA Economic Territory will jump to 74 percent of the world’s GDP.

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