Korea, China finally sign trade deal
President Park Geun-hye and Chinese President Xi Jinping watch while Minister of Trade, Industry and Energy Yoon Sang-jick, left, and Chinese Minister of Commerce Gao Hucheung sign a free trade agreement (FTA) between the two countries at the Great Hall of the People in Beijing, Monday. / Yonhap
FTA to remove bilateral tariffs in stages
By Kang Seung-woo
During a bilateral meeting in Beijing, President Park Geun-hye and Chinese President Xi Jinping confirmed the successful conclusion of the trade talks, which will remove most tariffs on goods and services traded between their two countries.Korea and China signed a long-stalled free trade agreement (FTA) Tuesday that will bring the two trading partners even closer.
The two heads of state attended the signing ceremony involving Minister of Trade, Industry and Energy Yoon Sang-jick and Chinese Minister of Commerce Gao Hucheung.
“I hope that our two countries can quickly work out the details and swiftly push for procedures to implement the deal and allow it to take effect,” President Park said. The Korea-China FTA will go into effect after ratification by the countries’ respective parliaments.
Xi said, “I expect both countries to further continue bilateral exchange and cooperation in various fields.”
The two nations started their formal free trade negotiations in May 2012, and Park and Xi agreed to work together in July to reach agreement by the end of 2014.
China has become Korea’s 13th FTA partner, but its significance is expected to exceed the previous pacts because of their trading volume. Already, farmers’ groups have staged protests against damages expected from the surge of cheap Chinese produce, while manufacturers have welcomed it.
According to Cheong Wa Dae, the two sides agreed to all of the FTA’s 22 chapters, including products, services, investment, finance and communication, but rice, a sensitive product for Korean farmers, was excluded from the deal.
Korea and China will remove their import tariffs on more than 90 percent of all products and more than 85 percent of imports by value within 20 years once the FTA is implemented.
“The Korea-China FTA is the most significant economic deal since the establishment of diplomatic ties in 1992, and provides an occasion to drastically develop bilateral economic ties,” Ahn Jong-beom, presidential secretary for economic affairs, told reporters.
China is already Korea’s largest trading partner and its bilateral trade for 2013 stood at $228.9 billion, which accounted for 26.05 percent of its overall exports in 2013.
The trade ministry expects the FTA deal to not only raise annual bilateral trade volume over the $300 billion mark by 2015, but help the nation’s per capita income eclipse $30,000 by enabling local companies to enter the Chinese market ahead of global rivals on relatively better conditions.
In addition, according to Woori Investment and Securities, the nation’s gross domestic product will grow 1.25 percent five years after the FTA implementation and 3.04 percent after 10 years.
Meanwhile, Park and Xi also agreed to intensify joint efforts to lead North Korea to denuclearization.
“In order to resume significant talks to induce the North to give up its nuclear weapons, the two leaders agreed to seek various ways,” said Ju Chul-ki, senior presidential secretary for foreign affairs.
He quoted Xi as saying that China stands firm against the North’s nuclear weapons and observes the U.N. resolutions that sanction North Korea for continuing to develop them.
They also concurred on the need to hold a trilateral foreign minister meeting that features Korea, China and Japan within this year.