The free trade agreement between Israel and South Korea was signed in Seoul in May by Economy Minister Amir Peretz and his South Korean counterpart, the Minister of Trade, Yoo Myung-Hee. The two countries expect the agreement to increase trade to up to $3 billion.
The trade pact will encourage the development of both Israeli and Korean economies by opening up market opportunities, enabling investment flows, facilitating technological cooperation, and developing a more friendly economic relationship that creates a win-win for both.
A Look at Free Trade Pacts
Free trade agreements are pushing forward the global economy and continue to have positive impacts. Free trade is responsible for global economic growths through innovation and has created multiple jobs in recent decades.
However, this type of free trade agreement has drawn criticisms for benefiting only large corporations because it erodes national sovereignty and leads to job losses due to international competition. It allows countries to specialize in what they do best, maturing mostly only national economies.
Also, while it eliminates expensive tariffs and barriers to trade, it is worth noting that these deals are not the same across all countries. Some agreements require partner nations to allow goods originating in the free trade partner’s country to enter without any duty or tariff, which might not be the same for others.
In the Case of Israel And South Korea
In the case of Israel and South Korea, the former will increase exports to the latter. On the other hand, South Korea will import products like vehicles and spare parts, air conditioning systems, and electrical items without paying customs duties. It will take a few months for the agreement to take effect and give these two partner countries a competitive advantage.
The free trade pact between Israel and South Korea has the potential to be mutually beneficial. It will help boost economic growth by opening up market opportunities, encouraging investment flows, facilitating technological cooperation, and developing a strong bilateral relationship that benefits all involved.
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