Korea, China will start FTA talks
By Chung Min-uck
The Ministry of Foreign Affairs and Trade announced the start of free trade agreement (FTA) talks with China, the nation’s largest trading partner, Wednesday.
“Beginning the negotiations is a historical step for both nations,” said Trade Minister Bark Tae-ho during a joint press conference with China’s Commerce Minister Chen Deming in Beijing.
“The negotiations will be a step-by-step process. We will first finalize modalities for negotiations in goods, services, investment and other areas when the talks start. After that the two countries will enter into dialogue covering all other sectors.”
The talks will begin as soon as this month. Both sides also agreed to discuss designating an outward processing zone, a sensitive issue as Seoul wants products made in the Gaeseong Industrial Complex in North Korea to be recognized as its goods.
The announcement took place after a ministerial meeting between Bark and Deng during the trade minister’s three-day visit to Beijing.
However, obstacles remain.
According to a joint agreement on Korea-China FTA negotiations, the two sides will first classify trade items into three categories — general, sensitive and extra-sensitive — before commencing overall negotiations.
Experts worry the countries will have a hard time reaching consensus as both will exert efforts to categorize their uncompetitive items as sensitive or extra-sensitive. The products classified as sensitive are likely to be protected by the respective governments.
“The negotiations will not be easy,” said Kwon Hyeok-jae, a Samsung Economic Research Institute researcher. “Key in this kind of a deal is how many products will be neglected in the free trade items list. If the number of items classified as sensitive or non-sensitive reach more than ten percent of all products concerned, the level of liberalization will be too low.”
The researcher said the social cost of a possible argument between the supporters and objectors of the Korea-China FTA will be tremendous too.
“If the negotiations lead to political disputes as in the case of free trade deal with the United States, the talks could be stalled and even lead to the pact being scrapped. The cost of this will be uncountable,” said Kwon.
He also said the foreign ministry should do its best to increase its political leverage by preparing backup measures for the agricultural and fisheries sectors in the case of a fully open market.
The announcement comes at a time when the two nations’ relations are at a low point following an attack Monday by Chinese fishermen on Korean fisheries inspectors. The inspectors were severely wounded and have been hospitalized.
Critics here say the foreign ministry should have postponed or reconsidered the announcement of the FTA negotiation in retaliation.