CCTV.com - CNTV English - CCTV News


Homepage > News > Biz >

China, S. Korea free trade talks 'likely next year'

08-05-2010 10:22 BJT

China-South Korea pact to 'act as catalyst'

BEIJING - A top South Korean diplomat to China has said that China and South Korea are likely to launch negotiations on a free trade agreement (FTA) next year, a move Chinese analysts said will help reshape trade in East Asia.

Yu Woo-ik, South Korea's ambassador to China, told China Daily in an exclusive interview that the two Asian nations "are expected to initiate official FTA talks in 2011", after a four-year feasibility study among governments, industrial associations and academies from the two countries was wrapped up recently.

Japan, China and South Korea have the largest, second-largest and fourth-largest economies in Asia, accounting for about 70 percent of the Asian economy and 18.6 percent of the global economy.

The free trade zone, if established, will hold a consumer population of 1.5 billion. It will be the third-largest economic area in the world, only after the North American Free Trade Agreement and the European Union.

China has reached free trade deals with Pakistan, the Association of Southeast Asian Nations, Iceland, Chile, Peru, Costa Rica and New Zealand. It is also in talks with Australia and Mongolia over similar agreements.

Zhan Xiaohong, an analyst on China-South Korea issues from the Chinese Academy of Social Sciences, said progress on the China-South Korea FTA will act as a catalyst for East Asian trade.

Long Guoqiang, a top trade policy researcher in China with the Development Research Center of the State Council, which was involved in the feasibility study, said: "It is really worth anticipating and good news for both, especially for the South Korean economy."

The Ministry of Commerce did not comment on the FTA issue.

The Economic Cooperation Framework Agreement (ECFA) signed by the Chinese mainland and Taiwan in June also gave impetus to progress on the China-South Korea negotiations, analysts said. Under the ECFA, the Chinese mainland and Taiwan will remove tariffs on close to 1,000 categories of goods to each other.

The ECFA will stimulate South Korea to accelerate the process of the FTA negotiations with Chinese mainland, as Taiwan is a major competitor with South Korea in areas such as electronics and chemicals, according to Nomura International.

The trade agreement across the Taiwan Straits will also threaten exporters from South Korea, which have relied much on the Chinese market, analysts said.

Yu admitted that South Korea has "a bit of concern" over the ECFA. He also said that the ECFA could enhance cross-Straits economic cooperation.

From the long-term perspective, China and South Korea should sign an FTA "to avoid unfair trade cooperation", Yu said.

China is South Korea's largest trade partner, followed by the United States. Last year, China-South Korea trade accounted for 21 percent of South Korea's foreign trade.

Early in 2004, nongovernmental organizations from China and South Korea initiated feasibility studies and in November 2006, the two sides launched a feasibility study among governments, industrial associations and academies. The studies showed that the FTA would benefit both economies.

Still, official negotiations cannot start as China and South Korea stakeholders have concerns over the implementation of the FTA.

In South Korea, industrial groups from the agriculture, forestry and fishing sectors are deeply concerned that the local industries will be hurt when the market is open to each other under the FTA framework, Yu said.

But Long Guoqiang from the Development Research Center of the State Council said the FTA will still help South Korea take advantage of the high growth of the Chinese economy.

Editor:Xiong Qu |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program