South Korea Examines FTA With China

Following the agreement between South Korea's President Lee Myung-Bak and his Chinese counterpart Hu Jintao during meetings last month, the South Korean government will shortly begin internal consultations on a free trade agreement (FTA) between the two nations.

Following the completion of joint feasibility studies, the two Presidents decided that negotiators would first focus on resolving sensitive bilateral trade issues, and, to that end, the South Korean government is to hold a first public hearing later this month to garner the opinions of experts and stakeholders.

The issue of agricultural tariffs is expected to be a particularly challenging area in future FTA negotiations that could commence before the end of the first half of this year. However, if a deal could be reached, it is recognized that the mutual benefits in increased trade could be substantial.

China is South Korea's most significant trading partner with total trade between the two countries amounting to USD224.8bn during the first eleven months of 2011, according to information from the Chinese government. Estimates have put a figure of USD300bn on that bilateral trade by 2015.

South Korea recognizes that, if successful in concluding an FTA with China, it could be the first nation to hold trade deals with the world's three largest markets, the European Union, the United States and China.

February 10, 2012

Source: Tax News