South Korea turning to Russia for free trade deal amid pressure from U.S.
Kim Hyun-chong held separate talks with Herman Gref, CEO of Russia's state-owned banking giant Sberbank and Russian Deputy Minister of Economic Development Alexei Gruzdev.
They discussed how to lay the foundation for a free trade agreement (FTA) between South Korea and the Eurasian Economic Union (EAEU), a South Korea trade ministry official said, without giving any further details.
The meetings represent South Korea's latest efforts to accelerate the ongoing negotiations between South Korea and the Eurasian Economic Union (EAEU) for an open trade pact.
South Korean officials said they hope to launch negotiations with the EAEU by the end of this year.
South Korean President Moon Jae-in and Russian Prime Minister Dmitry Medvedev agreed last week to accelerate the ongoing negotiations between South Korea and the EAEU for an FTA. The two leaders met on the sidelines of a regional forum in Manila.
Medvedev also said Russia is willing to work closely with South Korea for the Korea-EAEU free trade deal, according to the presidential office here.
South Korean officials say a free trade deal with the EAEU is effectively the same as clinching a bilateral trade deal with Russia.
Vietnam became the first country to sign an FTA with the EAEU in 2015.
Russia is a key member of the union that is seeking to model itself after the European Union. The EAEU also includes Armenia and three other former Soviet Republics: Belarus, Kazakhstan and Kyrgyzstan.
The combined gross domestic product of the five countries reached US$1.6 trillion and their combined population totaled 180 million in 2016. South Korea's trade volume with the EAEU region amounted to $14.19 billion in 2016, according to government data.
South Korea's state-run trade promotion agency said last year that South Korean firms can enjoy price competiveness in the EAEU region if a trade deal is reached.
Seoul's key export items to the region include cars, machinery and television sets while it imports crude oil and gas from the area.
The country's latest move illustrates its strategy to diversify its trading partners as the U.S. is ramping up trade pressure to reduce its trade deficit.
Seoul and Washington are in the process of amending their FTA, though no significant progress has been made yet.
The free trade pact -- which took effect in 2012 -- has widely been considered a symbol of deepening economic ties between Seoul and Washington, but U.S. President Donald Trump has vowed to fix or scrap it in the past, calling it a "horrible" deal.
Trump said earlier this month in Seoul that he was confident the sides will reach a free, fair and reciprocal trade deal.
South Korea plans to order billions of dollars of U.S. military equipment, a purchase Trump said would help reduce the U.S. trade deficit with South Korea.
Also Wednesday, South Korea expressed its firm stance to the U.S. against the additional opening of the agricultural market in the upcoming negotiations to amend the free trade pact.
"The government will not strike deals that turn the balance of interest against us," Yoo Myung-hee, a director general at the trade ministry, said in a Seoul meeting with people from the agricultural sector. "In previous talks, we've explained the sensitivity of the issue and stressed that it is difficult to further open up the agriculture market, as we've already widely opened the sector."
The farming industry has strongly opposed the negotiations, claiming that they have suffered massive damage due to cheaper U.S. food products over the past five years.
Yoo said the government is ready to scrap the deal if it is forced to cross "red lines" in regards to agricultural issues in future negotiations. ■