Negotiations will reportedly start on a Korean-Chinese free trade agreement in the near future, possibly as early as in June. A senior Blue House official is quoted as saying that Korea and China will hold a summit this month and declare the launch of negotiations next month.
As the official said, China has a strong desire to conclude negotiations on a free trade deal with Korea. But Korea has not hidden its reluctance for free trade with China.
Chinese Premier Wen Jiabao proposed to a hesitant Korean Prime Minister Kim Hwang-sik to launch negotiations first and make no haste in addressing potential problems when Kim was visiting Beijing in April. But Kim was noncommittal. He was quoted as saying that a careful study should precede the launch of negotiations if they are to produce intended results.
No explanation has been offered with regard to why Korea has suddenly decided to change course. But China has good reason to demand that negotiations start at an early date: It apparently does not want to see a substantial number of made-in-China products priced out of the Korean market when Korean-U.S. and Korean-EU free trade agreements, now awaiting ratification, go into effect.
True, a similar agreement with China would greatly benefit the Korean economy as it would raise exports of Korean-made autos, textiles and petrochemicals, to name only a few. According to what the Samsung Economic Research Institute calls a conservative estimate, the proposed accord would raise Korea’s gross domestic product no less than 2.72 percent.
But the downside would be a surge in agricultural imports from China ― a politically sensitive issue. Korean farmers’ organized opposition to free trade with China would be greater than with the United States or the European Union. Korea will have to determine how to address this thorny problem before engaging China for the promotion of free trade.