China to sign free trade agreement with South Korea

China to sign free trade agreement with South Korea

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Chinese President Xi Jinping visits South Korea

By next year, China intends to sign a free trade agreement with South Korea after talks.

China will sign a free trade agreement (FTA) with South Korea in 2015 after pertaining talks and negotiations, it was announced on November 17, 2014, on the sidelines of the Asia-Pacific (APAC) summit in Beijing. The two countries have agreed to remove tariffs on over 90 percent of the goods, apart from sorting out other technical issues.

Chinese President Xi Jinping visits South Korea

All pending negotiations, which began in 2012, will be rounded up and settled within this year, with the deal taking effect from second half of next year. The agreement will be signed with the intention to drastically remove trade and investment barriers between the two.

As per the FTA , there will be a 92 percent of tariff cut on Chinese goods exported to South Korea and 91 per cent of tariff cut on South Korean goods imported by China over 20 years. In 2014, the trade between the two nations was valued at $228.8 billion.

While China is the biggest export market for South Korea, the latter is the former’s third largest individual country export destination. The deal is currently pending parliamentary approval in both countries.

Once the FTA is finalized, China could take on similar talks with Japan and the two countries can progress with their agreements next year. Currently, China and Australia have signed an FTA running a decade, while South Korea has signed one with New Zealand.

Photo Credits: scmp.com