Seoul - AFP
Moody\'s Investors Service gave its backing to South Korea\'s free trade agreement with the United States, as protesters scheduled more street rallies in Seoul against the deal. The ratings agency\'s comments come after South Korea\'s ruling party pushed the long-delayed deal through parliament last week amid fierce opposition, with one MP setting off a tear gas canister. Tom Byrne, senior vice president of Moody\'s Investors Service, said: \"The FTA provides substantial, wide-ranging benefits that are credit-positive for Korea.\" The ratification bill is due to be signed Tuesday by President Lee Myung-Bak. Opponents have staged near-nightly protests since it was approved, with 38 police officers injured in clashes Saturday. Objectors say the pact unduly favours the United States following a revision in December and will hit Korean farmers and small businesses. More rallies are planned including a major protest in Seoul on Saturday, Yonhap news agency reported. Byrne said in a commentary the deal would boost South Korea\'s exports and economic growth and increase investment by removing technical barriers to trade, especially in services. \"Combined with a reduction of tariffs on imports and market-opening and liberalisation measures, it will spur a higher level of efficiency and competition in the Korean economy,\" he wrote. The deal would also serve to strengthen the US-South Korean security partnership against North Korea, he wrote. Almost 95 percent of trade in consumer and industrial products will become duty-free within five years. Many tariffs will be abolished immediately, and all trade covered by the deal will be tariff-free within a decade. Two-way trade was worth $88 billion last year, and Moody\'s cited an estimate by the US International Trade Commission that Korean exports to the US would increase by $6.4-$6.9 billion annually. The Korea Development Institute predicts that the FTA will raise the South\'s GDP growth rate by between 0.1-0.3 percentage points next year. Moody\'s rating on South Korea\'s sovereign debt is A1.