A bilateral free trade agreement between China and South Korea has been passed by South Korea’s National Assembly in a 196-33 vote with 36 abstentions.
The two countries signed the FTA on June 1st and the agreement still needs Chinese ratification in order to take effect, but all is expected to pass smoothly through the Chinese system.
“(This) will act as a new stimulus and a growth engine for our future economy with the increase of the country’s gross domestic product (GDP) by 0.96 percent in the next 10 years after it takes effect,” the Seoul government said in a ratification bill.
The two sides set a goal of eliminating tariffs on 92 percent of all products from China and 91 percent of all products from South Korea over the course of two decades.
Fending off intense opposition to the bill by the agriculture and fishery industries, floor leaders of two rival parties met and came up with a measure to support those who will be affected by cheaper goods coming from China into the South Korean market.
The support bill promises 1 trillion won (US$865 million) in direct financial support to minimize damage to farmers and fisherman.
Nearly 100 billion won will be financed from government and public enterprises over the next 10 years, according to the measure.
Ten to twenty-year phasing in
Under the Korea-China FTA, Seoul will eliminate its import tariffs on 79 percent of all products, or 9,690 goods, from China within 10 years following its implementation, while the same will go into effect for 71 percent of all products, or 5,846 items, from South Korea over the next decade.
The two sides set a goal of eliminating tariffs on 92 percent of all products from China and 91 percent of all products from South Korea in 20 years.
FTAs passed with New Zealand, Vietnam
Yonhap News Agency reports that in the same session Monday, the National Assembly additionally approved bilateral FTAs with New Zealand and Vietnam.
Under the Korea-Vietnam FTA signed in May, the Southeast Asian country will completely remove its import duties on 89.9 percent of all products from South Korea over a 15-year period following its implementation.
Seoul will do the same on 95.4 percent or 11,668 out of the total 12,232 products imported from Vietnam.
Under the FTA with New Zealand inked in late March, South Korea will remove tariffs on 96.4 percent of all products from New Zealand within 15 years of the deal taking effect. By comparison, New Zealand will eliminate tariffs on all South Korean goods within seven years of the deal taking effect.
The two sides agreed to exclude rice, a key staple food for Koreans, and other sensitive agricultural produce, including apples and garlic, from the deal.
As if the assembly had not done enough for the day, it also passed an addition to the 2013 FTA with Turkey in the investment and service sectors –an area that had until now been the subject of dispute.