Passing FTZ designation in Pusan and Kwangyang

PECT (Pusan East Container Terminal) and the first and second phase container terminals at the Port of Kwangyang will be designated as Free Trade Zones (FTZ) starting from January 1, 2002. This will assist in the manufacturing, assembling, exhibiting and selling of high valued-added goods.

The Ministry of Finance and Economy (MOFE) held a meeting with ministers from the Ministry of Planning and Budget, Ministry of Government Administration and Home Affairs (MOGAHA), Ministry of Commerce, Industry and Energy (MOCIE), Ministry of Construction and Transportation (MOCT), Ministry of Maritime Affairs and Fisheries (MOMAF), and the Ministry of Foreign Affairs and Trade (MOFAT) on December 6. During the meeting MOMAF and the City of Pusan called for inspections over a few days.

The Free Trade Zone (FTZ) council made sure that the FTZ would be enforced from January 1, 2002 after screening FTZ requests from the City of Pusan and MOMAF, and being printed in an official journal 15 to 20 days later.

Pusan and Kwangyang officially submitted applications to MOFE on November 7 under the guidance of MOMAF, hoping for the ports to be designated as FTZ. The FTZ committee will adopt the resolution from the meeting held December 6.

According to the law promulgated December 28, 1999 and titled, "Act on designation and operation of FTZ to foster international logistic hubs". To designate a port as FTZ, concerned ministers have to deliberate the bill and adopt it. Notification in an official journal is also required within 20days.

The PECT and Hanjin Terminal sites in the Port of Kamcheon, the first and second phase container terminals in the Port of Kwangyang, and the former Cheil Jedang site are about 1.27 million pyoung, or 4.19 million square meters (1 pyoung = 3.3 square meters).

In addition, 897 pyoung (2960 square meters) of hinterlands are scheduled to be designated as FTZ later, including the nearby Hanjin terminal in the Port of Kamcheon, a section of the Daesun Shipbuilding yard, the Yongdang site near PECT, and the second phase container terminal in Kwangyang.

The FTZ will help the ports of Pusan and Kwangyang to improve as total logistic providers, rapidly furthering their capacity to provide stevedoring, transportation, exhibitions, sales and processing.

The Port of Kwangyang could expect to produce tremendous added-value services by attracting LME (London Metal Exchange) warehouse facilities.

The Korea Maritime Institute (KMI) predicted that FTZ designation would create as much as 9 trillion won in added-value revenue and 48,000 jobs (31,000 in Pusan and 17,000 in Kwangyang) by 2011 if Pusan New Port and the Port of Kwangyang become involved as the government intended.

These designations could drive business away from other ports. For the Port of Inchon, Inchon City and Inchon Regional Maritime Affairs and Fisheries are expected to submit an application early next year.