Bumpy road ahead for bilateral free trade deal
By Park Si-soo
Korea’s chief trade negotiator said that the nation can ``put a halt to the free trade agreement talks with China’’ if negotiations on the bilateral contract run counter to the country’s interests.
Choi Seok-young, deputy minister for free trade agreements (FTA) at the Ministry of Foreign Affairs and Trade said Thursday that Seoul will push forward with the talks only after China agrees to establish concrete safeguards on sensitive industries to the deal, including farming and fisheries.
“We would not move to the next round of talks in the absence of concrete modality in which the dialogue will be made,” Choi told reporters in Seoul. “The modality is needed to protect sensitive industries such as farming and fisheries.”
The remarks came one day after the two countries jointly announced in Beijing that they would start FTA negotiations after seven years of joint research.
Korean Trade Minister Bark Tae-ho and Chinese Minister of Commerce Chen Deming said in a joint press conference that the Korea-China FTA is of significant importance for both countries in further strengthening and broadening bilateral economic cooperation and strategic partnership.
The two sides will hold the first round of negotiations later next week, during which they will mainly discuss administrative affairs that need to be addressed prior to trade talks, officials said.
Choi said the two sides had agreed to hold dialogue based on modality, a form of negotiation more suitable for multilateral talks than bilateral ones. He said the two countries decided to adopt the unusual, time-consuming format considering the deal’s greater economic impact on Korea than any other bilateral free trade pacts.
“China is very special to us,” the chief negotiator said. “It’s only a matter of time for China to become the world’s largest market. Its vibrant economic growth coupled with geographic closeness to Korea makes it harder for us to predict how great an impact the Seoul-Beijing FTA will carry in Korea, especially for sensitive industries.”
Agriculture and fisheries are considered the most sensitive sectors of the Korean economy, while China categorizes its manufacturing industries, including automobiles, machinery and oil sectors, as FTA-vulnerable.
Since the two countries are geographically close and have many agricultural products in common, Korean farmers have strongly opposed the envisioned trade deal.
The two sides have not set a time-line for striking the accord. But China has said it will be finalized within two years.
In response, Choi reaffirmed the lack of a specific timeline, saying the government will try hard to maximize national interests, while minimizing any negative impact on sensitive industries.
Amid growing anxiety, the Ministry for Food, Agriculture, Forestry and Fisheries said it would draw up tight safeguards to minimize fallout from the FTA on the country’s farming sector.
“The close proximity of China, the similar agricultural structure and sizable difference in product prices has raised considerable concerns that an open trade arrangement will hurt local farmers,” the ministry said in a press release.
To alleviate such concerns, every effort will be made to see farm products treated as exceptions in the agreement to better protect local farmers, the ministry said.
It also plans to receive input from farmers, consumers and experts to create strategies in the upcoming negotiations while at the same time building up the overall competitiveness of Korea's agricultural and food processing sector to boost exports.
Despite a cautious approach, many analysts claim the Korea-China FTA could deal a fatal blow to farmers.