South Korea Pledges More Support To Its Manufacturing Sector

June 28, 2007
Trying to protect its domestic market after free trade agreement

South Korea unveiled costly measures on June 28 to protect its domestic market from liberalization after reaching a free trade pact with the United States. The pact also calls for wider opening of South Korea's pharmaceutical industry, which experts say is expected to see a drastic fall in production and sales.The government plans to inject about one trillion won ($1.08 billion) into the country's pharmaceutical industry over the next 10 years. It also pledged bigger financial support for manufacturers.

Seoul and Washington have reached the pact, which is expected to be signed on June 30 before President George W. Bush's "fast-track" trade promotion authority expires. South Korea is also in free trade talks with the EU and Canada.

The deal struck with the U.S. in April has left many local workers and farmers fearing for their jobs, although it is supported by a majority of South Koreans, according to opinion polls. The finance ministry said farmers would receive compensation in cash equivalent to 85% of their revenue reduction from trade pacts, on top of a 119 trillion won (US$128 billion) long-term program to support them. It also promised to provide financial support to fishermen and manufacturers who go out of business.

Copyright Agence France-Presse, 2007

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