Beijing, Seoul effectively finalize free trade deal
Print Edition
CHINA and South Korea yesterday effectively secured a free trade agreement to remove tariffs on more than 90 percent of goods, though some details remained under negotiation.
Chinese President Xi Jinping and South Korean President Park Geun-hye signed a “substantial conclusion” of the free trade agreement that will sharply reduce barriers to commerce between the two trading giants, but leaves in place those on rice and automobiles.
South Korea said the deal, which has been under negotiation for more than two years, will help its small- and medium-sized producers of clothing, leisure goods and high-end electronics become competitive in China, thanks to the slashing of Beijing’s import tariffs.
Park’s office said the two countries had “effectively reached” a deal, which Xi described as one of “landmark importance.”
A South Korean government statement made it clear that differences remained over a few unspecified “details” that will have to be bridged before the agreement can be signed.
Any final document will require the approval of both national legislatures.
The statement said the deal will remove tariffs on 92 percent of Chinese goods imported to South Korea and 91 percent of South Korea’s goods imported to China within 20 years.
Since normalizing diplomatic relations in 1992, bilateral trade between China and South Korea has grown 36-fold to about US$228.8 billion last year.
China is now South Korea’s biggest trading partner and export market.
South Korea’s exports to China — the world’s second-largest economy — totaled US$145.8 billion last year, or more than a quarter of its total overseas shipments.
Since 1993, South Korea has been running a trade surplus with China, which last year was US$62.8 billion.
The two neighbors started trade negotiations in 2012, but progress has been delayed by differences on the extent of market-opening.
The free trade agreement also removes a number of regulatory restrictions in services, investment, finance and culture, which will make it easier for companies to form joint ventures and cooperate.
The agreement with South Korea will be China’s ninth bilateral free trade deal.
China hopes to also sign one with Australia before the end of this year.
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