The South Korea-China free trade agreement (FTA) went into effect on December 20th.
With the effectuation, tariffs will be removed for around 12 percent of South Korean exports to China and roughly 34 percent of Chinese exports to South Korea this year. Gradually, the two nations will expand the number of export items that will be free from customs duty.
Twenty years after the trade deal’s effectuation, tariffs on seven-thousand-428 South Korean exports to China will be eliminated, putting the market opening rate at 90-point-seven percent. On items that South Korea imports from China, tariffs will be removed on 11-thousand-272. That would put the market opening rate at 92-point-two percent.
Some 610 items, including regionally sensitive ones such as rice, have been excluded from the tariff eliminations.
South Korea and China launched FTA negotiations in May 2012. An agreement was reached in November after 14 rounds of talks. The two countries signed the accord on June first in Seoul. It was ratified in parliament on November 30.
The government sought the ratification of the FTA within this year in order to enjoy further tariff reductions worth some one-and-a-half trillion won this year alone.
With their FTA going into effect, the economic ties between South Korea and China have further deepened.
Given that South Korea is taking part in the China-led Asia Infrastructure Investment Bank, South Korea will now be able to further solidify its strategic cooperative partnership.
With the latest effectuation, South Korea can now engage in free trade with the world’s top three economic powers, which include the U.S. and the European Union.
Also on December 20, South Korea’s FTAs with Vietnam and New Zealand went into effect. With the simultaneous effectuation of the three trade deals, South Korea expects its GDP will witness further growth of one percent in the next ten years and the creation of some 55-thousand jobs.