South Korea, China To Proceed With FTA Talks

The Presidents of South Korea and China have agreed during three days of meetings, which concluded on January 11, 2012, that the nations will commence negotiations towards a free trade agreement (FTA) to boost trade relations.

Korea's President Lee Myung-Bak and his Chinese counterpart Hu Jintao agreed that negotiators would first focus on resolving sensitive bilateral trade issues before moving on to specific details of what should be included in the agreement.

China is South Korea's most significant trading partner with bilateral trade amounting to USD224.8bn during the first eleven months of 2011, according to information from the Chinese government.

China's diplomatic ties with North Korea however are a topic of friction between the two states, and was reported to have been discussed at length during the meetings. While trade between China and North Korea is significant (at over USD5bn annually), trade ties are meagre in comparison to those with South Korea.

The issue of agricultural tariffs is also expected to be a challenging area for negotiators.

If South Korea is successful in concluding a free trade agreement with China it will be the first nation to hold trade deals with the world's three largest markets, the European Union, the United States and China.

South Korea is negotiating the free trade agreement with China as part of a larger trilateral agreement, to also include Japan.

Source: Tax News