South
Korea is overtaking competitors thanks to its free-trade deals, President Lee
Myung-Bak declared Wednesday, a day after a pact with the United States was
ratified amid chaotic scenes in parliament.
Business groups also hailed the agreement as
opening a new era for Asia's fourth-largest economy, but opponents took to the
streets and police used water cannon to block an estimated 2,500 protesters in
central Seoul Tuesday night.
An opposition legislator also set off a tear
gas canister in parliament before being bundled out of the chamber by security
guards as he yelled protests.
"We have expanded our economic territory
to cover 61 percent of the world's gross domestic product," Lee said.
"This means that we're moving one step
ahead of any other country we compete with. If we seize this opportunity and
unite our strength, we can overcome the (global economic) crisis and make a
leap," Yonhap news agency quoted him as saying.
Lee, speaking during a meeting with ministers,
told them to take thorough measures to protect farmers and small businesses.
When the long-delayed US agreement comes into
force, export-dependent South Korea will have free-trade deals with the world's
largest economy as well as the European Union, India, 10 Southeast Asian
nations and several other states.
The two sides hope it will come into effect on
January 1 after it sailed through the US Congress last month.
After weeks of unsuccessful haggling about
opposition objections to the agreement, Lee's ruling party Tuesday called a
snap parliamentary session and ratified the deal -- prompting the tear gas
protest.
The main opposition Democratic Party vowed
Wednesday to boycott all parliamentary sessions in anger at the railroading of
the bill.
US-South Korean trade totalled $88 billion in
goods and services last year, with Seoul enjoying a $10 billion advantage.
Under the trade pact, Seoul will immediately
reduce or eliminate tariffs on US cars and trucks, while the US will have more
time to cut its already lower duties on South Korean vehicles.
In the long term, US farm exports will see
duties reduced.
But American exporters will face tough
competition from Europe after Brussels beat Washington to the punch in signing
an FTA with Seoul.
South Korea can expect a boost in exports. But
analysts say the main gain will be improved investment conditions, making the
country more attractive for foreign investment and foreign services providers.
DBS Bank in Singapore said US foreign direct
investment is likely to rise, especially in the services sector.
"This will help sustain Korea's long-term
economic growth through boosting productivity and capital formation, easing the
pressure of population ageing over the next decade," it said.
AFP
-- Dow Jones Newswires contributed to this
report --
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