Statement by H.E. Mr. CHO Tae-yul
Vice Minister of Foreign Affairs
Republic of Korea
at the IISS Cartagena Dialogue: The Trans-Pacific Summit
on “Korean Perspective on the Pacific Alliance”

Dr. John Chipman,
Distinguished Guests,
Ladies and Gentlemen,

First of all, I would like to express my appreciation to the Government of Columbia and IISS for inviting me to this inaugural meeting of the Cartagena Dialogue: The Trans-Pacific Summit. It is absolutely clear why IISS selected Pacific Alliance as the main theme as it launches the Cartagena Dialogue. It is because the Pacific Alliance is not only the new model for regional integration in Latin America, but also it has been expanding its geo-economic and political influence in the international community by making impressive progress in a short span of time.

Korea has also been paying attention to the great potential for cooperation with the member countries of the Pacific Alliance since even before its inception. By selecting Chile as our first-ever partner for free trade agreement (FTA) back in 2003 and then later concluding FTAs with Peru and Colombia, we have laid a solid foundation for cooperation framework with the Pacific Alliance on a bilateral basis. The only missing link in this FTA network with this Alliance is between Korea and Mexico, but dialogue has been underway between the two governments to restart the negotiations for a bilateral FTA which was suspended in 2008. And in 2013, a framework for multilateral cooperation with the Pacific Alliance was established by Korea’s acceptance into the Alliance as an observer country.

Today, as a representative of an observer country of the Pacific Alliance and a major trading nation in Asia, I am pleased to share with you Korea’s perspective on the Pacific Alliance and its vision for future cooperation with the Alliance.

(Assessment of the Pacific Alliance)

More than anything else, trust lies at the foundation of Korea’s perspective towards the Pacific Alliance: trust accumulated through our traditional ties of friendship and cooperation, shaped by Colombia’s participation in the Korean War in the early 1950s and many exchanges of visits between our leaders and those of the Alliance over the past decades. We feel boundless trust towards the consistency of the Alliance with which they have been resolutely upholding the values and principles of democracy and market economy.

The Pacific Alliance, launched three years ago, has been growing steadily year after year, with the free movement of people and commodities as well as the integration of the stock market. This was possible because the Alliance was able to move single-mindedly towards integration and openness, based on democratic legitimacy and popular support. It is only natural that Korea has faith in the Pacific Alliance that is bound together by these shared values and interests.

Second, Korea feels a sense of camaraderie with the countries of the Pacific Alliance. As is well known, during the last century, Latin America was a scene of intense competition for theories of economic growth. Different views towards open markets and the global economic system still remain. However, due to the dazzling growth of the Pacific Alliance, the debate over the theories of economic growth in Latin America is now somewhat losing steam.

If the dependency theory, which advocated a road of independent growth by cutting itself off from the international economic system, was the winner in the 1980s, then the true winner in the era of connectivity of the 21st century is the Pacific Alliance. This is illustrated by the amount of foreign investment the Alliance has attracted, the willingness of countries like Panama and Costa Rica to join it as full-fledged members, and the number of observer countries which has now reached thirty two, encompassing virtually all continents of the globe.

We feel a sense of comradeship with the Alliance because we also have been enhancing our competitiveness by relentlessly pursuing an open economy. We chose competition over isolation, and focused on satisfying the needs of new customers while exploring new markets. Korea, as it stands today, would not exist if it were not for the ‘learning by exporting’ and the ambitious integration into the international economic system.

The reason why Korea welcomes the Alliance’s policy of ‘Pivot to Asia’, a policy to promote cooperation with Asia, is because cooperation between Korea and the Pacific Alliance, both models of successful policies of open economy, can send a clear message to today’s global economy full of uncertainty.

In particular, given that the WTO Doha round negotiations are failing to make progress, the Pacific Alliance’s pursuit of open regionalism will add new momentum to reaching an agreement on the Trans-Pacific Partnership (TPP). Korea, which has enjoyed economic growth by reaping the benefits of the multilateral trading system, has been pushing for greater trade liberalization through aggressively expanding its FTA network since the early 2000s and now ranks number three in terms of total GDP of the countries with which it has concluded FTAs. If Korea joins the TPP sooner rather than later, the Pacific Alliance advocating a ‘bridge to Asia’ and Korea emerging as an FTA hub in East Asia will significantly contribute to the development of the global free trade system as the two cornerstones of the Trans-Pacific Partnership.

(Cooperation between Korea and the Pacific Alliance)

As such, Korea and the Pacific Alliance have been building a strong foundation for economic cooperation based on trust and a sense of camaraderie. During the past 10 years, Korea’s trade with the Pacific Alliance increased by 263 percent and last year reached 26 billion dollars, which amounts to almost half of Korea’s trade with Latin America as a whole.

What is more encouraging is that our bilateral trade volume, which had declined in 2009 due to the global economic crisis, recovered immediately and today our two-way trade is becoming even more vibrant than before. This illustrates that the trade relationship between Korea and the Alliance enjoys a significant degree of resilience thanks to the existing web of bilateral FTAs.

Trade between Korea and Peru increased 67 percent when the bilateral FTA came into effect in 2011. This case attests to the trade promotion effect of FTAs. Korea’s FTA with Colombia which was signed in 2013 is expected to come into effect very soon. The Korea-Mexico FTA, if the negotiations are resumed and concluded, will dramatically increase trade between Korea and the Pacific Alliance.

Recently, investment has also been showing an impressive growth. Korea’s investment in the Pacific Alliance has been on the rise since the global economic crisis in 2009. In 2012 alone, it registered 540 million dollars. Areas of Korea’s investment in the Alliance have also moved beyond mining and have expanded to manufacturing and services industries. It appears that the strategic values of the Pacific Alliance and the recent increase in their middle classes have brought on greater confidence among Korean investors.

As the economies of the Pacific Alliance continue to grow, the infrastructure gap within the Alliance will widen. And I anticipate that Korean companies can fill the growing gap and thus contribute to laying the foundation for sustainable growth of the Alliance. Korean companies are recognized for their world class technology, cost competitiveness and project execution ability. I am quite confident that they will be able to create high quality jobs while carrying out high value added projects in the areas of energy, transport and environment in the Pacific Alliance countries.

Citi Group forecasted that the total infrastructure gap of Latin America will reach 170 billion US dollars in 2020. And last year, Korean companies won 6.7 billion dollars worth of contracts in construction in Latin America. This indicates that competitive Korean companies are already making inroads and contributing to filling the infrastructure gap in Latin America.

Ladies and Gentlemen,

The Pacific Alliance which has accelerated its integration in a short period of time has left a deep impression on many countries outside the region, including Korea. The ‘Pacific Pumas’ are receiving acclaim for presenting a new model of regional integration by introducing a variety of bold and innovative measures and an early harvest policy which focuses on streamlining formalities and procedures and prioritizing attainable results.

To make substantive contributions to such efforts for deeper and faster integration of the Pacific Alliance, Korea had proposed the Single Window Project. This project of building a state-of-the-art regional customs system will contribute to increasing intra-trade within the Alliance, which currently stands at a mere 4 percent, in stark contrast to its high level of trade liberalization of 92 percent. By linking together all the necessary information for exports and imports, it will prevent the duplication of unnecessary documents. This, in turn, will accelerate the export and import process of member states, ultimately paving the way for trade expansion and economic integration of the member states of the Pacific Alliance.

In addition, we support the efforts of the Pacific Alliance to raise its visibility and recognition such as the initiatives for operating a joint trade office and holding joint trade expositions. We have been taking measures to better inform our public and companies about the Pacific Alliance -- the world’s 8th largest economy, boasting the best business environment in Latin America, and a value-driven alliance adhering to the principles of democracy and market economy.

A strategist of our generation Dr. Brzezinski once said, “The first and most important is to emphasize the enduring nature of the alliance relationship in particular with Europe which does share our values and interests even if it disagrees with us on specific policies.” Like his saying, sharing values is sharing the future. And the relations between countries that share the future will remain strong.

I am confident that the Pacific Alliance’s commitment towards democracy and market economy will remain steadfast. And I hope that the Alliance will disseminate these common values throughout Latin America by strengthening the identity and pride of the Alliance, and by continuing to mark exemplary growth through proper economic policies.

As a reliable partner for the open regionalism pursued by the Pacific Alliance and as its observer country, Korea will continue to support the development of the Alliance and strengthen our partnership with it. Discussions at this Cartagena Dialogue on a wide range of issues related to the Trans-Pacific Partnership will provide important food for thought for Korea in designing its policy towards the Pacific Alliance in particular and Latin America in general. If you take the initials out of the words “the Pacific Alliance and the Republic of Korea”, it will make “PARK”, the last name of our president. Strengthening partnership with the Pacific Alliance is very much high on the agenda of President Park and that is the message I want to deliver to you today.

I very much appreciate this opportunity to participate in this special event and to share some of my thoughts with you. Thank you very much. /END/