News Analysis; BIT with Tokyo Sought Ahead of Signing Free Trade Pact
TOKYO ---- Korea and Japan are moving one step closer toward concluding the bilateral investment treaty (BIT), which would be an institutional mechanism for Japanese businessmen to invest in Korea and vice versa.
President Kim Dae-jung yesterday proposed the signing of the Korea-Japan investment treaty in a dinner meeting with Japanese business leaders here.
Once the landmark treaty is signed, probably within this year, Japanese businessmen will be able to enjoy ``national treatment'' (equal and nondiscriminatory treatment between locals and foreigners) and the most-favored-nation (MFN) status, even before they start investing in Korea. In the same vein, Korean businessmen wishing to invest in Japan would enjoy the same treatment.
Businessmen of both countries will be able to invest in the full range of industrial sectors, without restrictions, although minor prohibitions on investing in ``sensitive sectors'' including the defense industry, will be put in place.
Japanese businessmen will be allowed to stay in Korea and Korean businessmen in Japan even before they invest in each other's country, once the BIT is put into effect.
Under the BIT, a host country is barred from imposing any type of mandatory requirement on investors, including that of asking them to export a certain portion of products to third countries.
In the case of any disputes arising, investors will be able to lodge their complaints and settle the matter through an international dispute arbitration organization.
Negotiators of the two countries have met four times to conclude the BIT. Last May, when Japanese Prime Minister Yoshiro Mori visited Seoul, President Kim and
Mori agreed to expedite the bilateral negotiations, so that the BIT could be concluded during this year.
In two rounds of summit in the Japanese spa town of Atami, today and tomorrow,Kim and Mori are expected to reaffirm their position to conclude the BIT this year, according to Lee Ki-ho, senior presidential secretary for economic affairs.
Lee, who is accompanying President Kim here, said that once the agreement is signed, a strategic marriage of Japan's hi-tech sectors with Korea's production facilities will be arranged, which will give momentum to sustained development of the Korean economy. …