Will Korea-China FTA negotiations pick up the pace?
Published : 2014-07-04 21:18
Updated : 2014-07-04 21:18
Negotiations between South Korea and China on a bilateral free trade agreement appear likely to pick up pace as the presidents of the two countries have set the end of the year as the deadline for concluding the deal.
For this end, South Korea is expected to yield on the agro-fishery industry while the Chinese counterpart is expected to give in on opening the manufacturing market, insiders say.
“Chinese President Xi Jinping is determined to push the Chinese officials to accelerate the talks. China may want to conclude the deal by November, when Beijing is to host APEC meetings,” said Myoung Jin-ho, senior researcher at the Institute for International Trade.
The two parties have held 11 negotiation sessions since 2012, and have reached a first-phase agreement for liberalizing 90 percent of the total goods traded between the countries, which translate into 85 percent of the value of the goods imported to Korea.
However, the second phase bore little fruit as the two sides locked horns over which products should be included in the 1,200 items that would be “highly sensitive items” that can be exempted from the non-tariff list.
Oceans and Fisheries Minister Lee Ju-young, Agriculture Minister Lee Dong-phil and Finance Minister Hyun Oh-seok have previously pledged to keep as many agricultural and fisheries products excluded as possible to reduce the impact on the local economy.
The Korea Rural Economic Institute estimated that the implementation of a Korea-China FTA would result in a 1.2 percent drop in Korean agricultural production while imports from China would surge by up to 209 percent.
China, on the other hand, has been wary against South Korean manufacturers including automobile, steel, petrochemical and makers.
“Each side has to make a sacrifice in order to aim for mutual benefits,” Myoung said.
The Korea-China trade market was worth $230 billion (232 trillion won) in 2013, accounting for just over 20 percent of Korea’s total trade volume. China is the largest importer of South Korean goods and the world’s second-largest economy.