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Business / Economy

FTA signed with Seoul

By Zhong Nan (China Daily) Updated: 2015-06-02 08:51

Tariffs to be removed on more than 90% of goods in either direction, say officials

China signed its largest bilateral free trade agreement in terms of volume on Monday, with close neighbor South Korea.

Under the agreement, China will remove tariffs on 91 percent of all products from South Korea within the next 20 years, while Seoul will eliminate tariffs on 92 percent of all goods in the other direction.

The two nations first began talks in May 2012 covering 17 areas, including trade in goods and services, healthcare, entertainment, investment and trade rules, as well as e-commerce and government procurement.

China is South Korea's biggest trading partner as well as its biggest export market, with bilateral trade totaling $235.4 billion in 2014, customs figures show.

South Korea is also one of China's major foreign investors with investment of $1.6 billion made in the first quarter of this year alone.

After President Xi Jinping's visit to the country in July 2014, negotiations on the pact accelerated quickly. Xi and his South Korean counterpart Park Geun-hye announced a conclusion of substantive talks on the deal in Beijing the following November.

Commerce Minister Gao Hucheng and his South Korean counterpart Yoon Sang-jick signed the bilateral FTA in Seoul, in English, Chinese and Korean on Monday, and it will be implemented after approval from the parliaments of both countries.

During talks on the sidelines of the ceremony, Gao and Yoon said they shared the view that the China-South Korea FTA will not only expand trade and investment but serve as a cooperative platform for the nations to develop new growth engines.

Sun Yuanjiang, deputy director-general of the department of international trade and economic affairs at the Ministry of Commerce, said the FTA will also provide the model as well as the driving force for progress toward a China-Japan-South Korea FTA, and a Regional Comprehensive Economic Partnership.

The RCEP is a multilateral FTA that will include China, South Korea, Japan and 10 members of the Association of Southeast Asian Nations as well as India, Australia and New Zealand.

China, South Korea and Japan are negotiating on a trilateral FTA, with officials from another 16 other countries also involved.

"Economic integration in East Asia has been under strain in recent years and a bilateral FTA will help advance trade and investment ties under the RCEP framework," said Sun.

South Korea has already set a goal of trade with China worth $300 billion this year.

Zhao Zhongxiu, a trade professor at the University of International Business and Economics in Beijing, said the FTA is South Korea's most significant trade pact to date because China is its largest trading partner.

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