South Korea and China are starting discussions toward reaching a free-trade agreement and want to establish the accord as early as possible, Chinese Commerce Minister Chen Deming said.
The first round of talks will take place this month, Chen said at a briefing in Beijing today with South Korean Trade Minister Bark Tae-ho. The two countries’ goal is to lift trade to $300 billion in 2016, Chen said.
Asia’s biggest and fourth-biggest economies would form a market with annual trade now worth more than $200 billion. An agreement would also be one of China’s largest trade accords with another country. Trade between the two nations rose 19 percent in 2011, according to China’s customs data.
Officials have previously signaled interest in a trade accord. South Korean Foreign Minister Kim Sung-hwan said in January that “both sides basically share the view that a free trade agreement between South Korea and China is needed.”
Chen said the world economic recovery is sluggish as the global financial crisis endures. Trade protectionism is rising, he said.
Exports to China, South Korea’s largest market, increased 14.9 percent to $134.2 billion in 2011 from a year ago, which accounted for 24.1 percent of South Korea’s total exports last year, according to a Korea Customs Service report on Jan. 15.
China has free-trade agreements with 10 partners including New Zealand and Singapore, according to the commerce ministry’s website. The nation, the world’s biggest exporter, was already in FTA talks with five trading partners including Iceland and Norway, the ministry said.
China, South Korea and Japan are also studying the establishment of a free trade pact among the three nations. Formal talks have not started yet. Chen said today that a bilateral accord with South Korea doesn’t contradict a three-way agreement and could be the foundation for such an accord.
South Korea’s free trade agreement with the U.S., the world’s largest economy, took effect March 15, after the countries’ legislatures approved a pact first signed in 2007. The biggest U.S. trade accord in almost two decades will cut about 80 percent of tariffs between the nations.
The U.S. is South Korea’s third-largest trading partner and bilateral trade totaled $101 billion in 2011, according to data compiled by the Korea Customs Service.