South Korea’s trade minister on Wednesday dismissed criticism that Seoul had rushed into a bilateral free trade agreement (FTA) with Beijing, calling the pact a well-balanced deal that reflects both countries’ interests as well as their future trade relationship.
“The Korea-FTA is an agreement that strictly abided by the rule of balance,” Yoon Sang-jick said while meeting with reporters here.
South Korean and Chinese heads of state on Monday declared a “substantial conclusion” of FTA talks in a bilateral summit in Beijing. The announcement marked the end of the FTA negotiations started in May 2012.
Under the deal, as explained by Seoul officials, South Korea will completely eliminate its import tariffs on 5,823 industrial products from China immediately after the Korea-China FTA is implemented while China will reciprocate the move on 1,258 products from South Korea.
Such a large discrepancy in numbers prompted suspicions here that the government may have rushed to strike a deal.
Beijing is said to have pushed for the conclusion of the Korea-China FTA talks so that it could be announced at the two countries’ summit this week.
Those who suspect imprudence on Seoul’s part claim South Korea, too, may have hasted for a deal, assuming that China was more likely to make concessions for an agreement before the bilateral summit.
Yoon dismissed the claim, saying neither side had been rash.
“China’s trade deficit (with South Korea) came to US$67 billion last year, according to our data, and $90 billion, according to its own data. In that sense, China approached the Korea-China FTA talks with much care and caution,” Yoon said.
The minister explained the large gap in the number of products to be liberalized by each country was because the South Korean market is already more open than that of China.
The number of products to be liberalized by South Korea includes those that are already brought into the country free of tax, according to Yoon.
The agreement will rather be more beneficial to South Korean products, at least in terms of value, according to the minister.
The trade ministry estimates that the amount of South Korean exports to China that will benefit from import tax elimination in China will reach $73.34 billion once the trade pact goes into effect.
The amount is greater than the country’s overall exports to the United States in 2013, Yoon noted, stressing the significance of the Korea-China FTA.
The amount of Chinese goods that will benefit from such an elimination of South Korea’s import duties is estimated at $41.49 billion.
South Korea’s exports to China came to $145.8 billion last year, accounting for about 26.1 percent of the country’s total exports. Shipments to the United States came to $62.1 billion, or about 11.1 percent of the total.
“What is clear is that China was very determined to reach a conclusion of the FTA negotiations before the APEC summit, and our FTA negotiators also did their best,” Yoon said. “It was in no way a rashly reached agreement.” (Yonhap)
