On December 9, South Korea's Ambassador to China, Kim Jang-soo, and China's Vice Minister of Commerce, Wang Shouwen, exchanged diplomatic notes that set December 20, 2015, as the date for the entry into force of the free trade agreement (CSKFTA) between the two countries.
The CSKFTA was signed on June 1 this year, soon after negotiations commenced in May 2012. As the most substantial FTA South Korea has signed, and given its expected effect of increasing South Korean economic growth prospects, the Government applied a significant amount of pressure in Parliament for its ratification by the end of 2015.
That ratification occurred on November 30, and the agreement is now able to come into effect, following subsequent approval by China's State Council. As the CSKFTA will come into force in 2015, the tariff reductions for its first year will occur immediately. Its scheduled second year reductions will take effect on January 1, 2016.
Within the terms of the CSKFTA, the two countries have agreed to eliminate import tariffs on over 90 percent of all products traded between them and over 85 percent of their annual trade by value. Import duties on non-sensitive products will be cancelled either immediately or within ten years, and those on sensitive products will be abolished within 10-20 years of the agreement becoming effective.
The two sides were able to reach the agreement by excluding ultra-sensitive items from the arrangement. South Korea has only agreed to a part-opening of its agricultural sector, while continuing to exclude such products as rice, pork, and beef.
China is already South Korea's primary trading partner, receiving a quarter of its exports, and South Korea is China's third-largest trading partner. The total value of trade between the two countries is expected to reach more than USD300bn this year.
By Xinhua
