The bilateral free trade agreement(FTA) between South Korea and China is expected to greatly help boost the countries' economic development while creating the largest economic bloc in the region, experts and government officials said Monday.
The countries declared a de facto conclusion of their FTA negotiations earlier in the day.
Once implemented, the Korea-China FTA will significantly boost bilateral trade between China, the world's second-largest economy, and South Korea, the fourth-largest in Asia, they said.
The newly concluded FTA with China will mark the 13th of its kind signed by South Korea, but the experts and government officials here said it will be, by far, the largest.
Already, China is South Korea's largest trading partner, accounting for 26.05 percent of South Korea's overall exports in 2013, according to latest customs data.
The United States, by comparison, imported US$62.1 billion worth of South Korean products, accounting for 11.09 percent of South Korea's total exports in the same year. South Korea implemented its bilateral FTA with the U.S. in March 2012.
"The reason an FTA with China will be more significant than the one with the United States is China's physical proximity to South Korea, which means the countries' bilateral trade has so much more potential to grow following the implementation of the FTA," an official from the Ministry of Trade, Industry and Energy said, asking not to be identified.
If implemented early next year, the Korea-China FTA is expected to help boost the countries' annual bilateral trade to US$300 billion in 2015, according to the ministry. This will mark a 39.5 percent hike from $215.1 billion in 2012.
South Korea's trade territory, represented by the combined gross domestic product of countries with which South Korea has a free trade pact, will be expanded from the current 61 percent to 73 percent.
"This basically means the same portion of the global population will have access to South Korean products under free trade agreements," another ministry official said.
"It also means all South Korean products that benefit from the country's existing FTAs will be such an advantage for 73 percent of the world's population."
Under the proposed FTA, South Korea and China have agreed to eliminate their import tariffs on over 90 percent of all products traded between them, making it the highest-level FTA signed by China.
Woo Tae-hee, South Korea's deputy trade minister, later noted the political impact of the Korea-China FTA may be as great as its economic impact.
"It is not a matter of which side will benefit more from the FTA because I believe the agreement will have a political impact on the entire Northeast Asian region and the Korean Peninsula. I believe the FTA will also help secure peace and stability in the Northeast Asian region," he told a press briefing.
"The Korea-China FTA is expected to become a chance for the country to act as a linchpin between countries in the region as they move to boost their economic cooperation and form an economic bloc in the Asia-Pacific region," he added.
The countries are expected to initial the agreement after the proposed deal undergoes a legal review, called legal scrubbing, that could take up to three months, according to officials.
The FTA needs to be formally signed before it can be sent to the countries' respective legislatures for ratification. (Yonhap)