Formal talks start on China FTA
Korea and China announced they would start negotiations on a bilateral free trade agreement after five years of joint research.
Korean Trade Minister Bark Tae-ho and Chinese Minister of Commerce Chen Deming released a joint statement announcing the start of formal negotiations after concluding a two-day meeting in Beijing yesterday.
“The two ministers shared the view that the Korea-China FTA is of significant importance for both countries in further strengthening and broadening long-existing bilateral economic cooperation and trade relations, and thus deepening the Korea-China Strategic Cooperative Partnership,” the statement said.
The two sides agreed to open the first round of negotiations later this month.
China is Korea’s largest trading partner, with bilateral trade expected to reach $300 billion by 2015.
The announcement came four months after the leaders of the two trading partners agreed to kick off free trade talks at an early date.
Since 2007, Korea and China had held a series of joint feasibility studies on a possible free trade deal and exchanged views on sensitive issues.
Bark said the Korea-China FTA will be different from FTAs with other countries and negotiated in a different way.
“Unlike with other FTAs, the two countries will hold negotiations phase-by-phase in order to protect sensitive items of each country,” Bark said.
“Goods will be divided into a normal track and sensitive track in the first place,” Bark explained. “Then, items in the sensitive track will be categorized as either sensitive or highly sensitive items.”
Agriculture and fisheries are considered the most sensitive sectors of the Korean economy, while China categorizes its manufacturing industries - which include the automobile, machinery and oil sectors - as sensitive.
For the sensitive track, they agreed to roll out various measures, including longer phase-out periods, partial reductions and the exclusion of tariffs.
The two sides have not set a timeline for striking the deal, Korean officials said.
However, Chen said he hoped a bilateral deal will be finalized within two years.
Earlier, Bark pledged Korea would not start any formal negotiations with China unless the two countries reach agreement on protection for sensitive items, especially agricultural products.
Bark and Chen emphasized that the level of liberalization for trade in goods, services and investments should go beyond each country’s commitment in the World Trade Organization agreement, making the Korea-China FTA a model for economic integration in Asia.
Since Korea and China are geographically close and have many agricultural products in common, Korean farmers strongly oppose a China deal. A public hearing held by the trade ministry in late February drew fierce demonstrations by farmers.
By Song Su-hyun, Yonhap [firstname.lastname@example.org]