South Korea Prioritizes FTA Talks With China, Vietnam

At a ministerial meeting on international economic affairs on May 15, Deputy Prime Minister and Minister of Strategy and Finance Hyun Oh-seok discussed the present progress in South Korea's negotiations for free trade agreements (FTAs) with China and Vietnam.

In his remarks to the meeting, Hyun noted that, in the current second stage of the South Korea-China FTA negotiations (the first stage having reached a fundamental agreement on the general levels of market access between them), both countries are now "identifying areas they are willing to open up to free trade and areas they want to remain protected."

Hyun promised that the Government, as far as possible, will draw up safety measures related to agriculture and fisheries – South Korea's two highly-sensitive sectors – in the process of the FTA talks with China. However, an 11th round of negotiations is due to be held shortly, with concerns still being expressed in South Korea's agricultural sector over the impact of possible imports from China, and from Chinese manufacturers over reduced tariffs for South Korean exports.

Nevertheless, Hyun also pointed out that China is one of South Korea's major trading partners and the Government is very interested in signing a wide-reaching FTA with China "before it is too late," in order to take a leading role in regional integration discussions within the proposed Regional Comprehensive Economic Partnership, which would encompass the ten member countries of the Association of Southeast Asian Nations (ASEAN) and its current FTA partners – South Korea, China, Japan, Australia, India and New Zealand.

He also noted that, while Vietnam is also an ASEAN member and therefore within the existing South Korea-ASEAN FTA, that agreement made only "low-level (tariff) concessions," and South Korean companies are not in a position to compete effectively with businesses from other countries, such as Japan, which have already signed bilateral FTAs with Vietnam.

As Vietnam is the sixth largest receiver of South Korean exports, and with many South Korean companies having already made investments in that country, he confirmed that the Government will continue to pursue the conclusion of the FTA talks with Vietnam, hopefully by the end of this year.

Source: Tax News