International Business News – On July 13, the Ministry of Commerce of China and the Ministry of Industry, Trade and Energy of South Korea held a meeting of chief negotiators for the second phase of the FTA negotiation via video. The two sides conducted in-depth consultations on issues such as cross-border trade in services, investment and financial services, and market access on the negative list, and made positive progress.
The two sides believe that China and South Korea are each other’s important economic and trade partners, and actively promote the second phase of the China-South Korea Free Trade Agreement negotiations to achieve substantial results at an early date, which will enhance the level of openness and cooperation in bilateral service trade and investment, further stimulate the trade potential of the two countries, and promote China-ROK economic and trade relations have reached a new level.
Negotiations have a good foundation
“China and South Korea have promised when the FTA was signed in 2015 that after the agreement takes effect, the two sides will continue to carry out negotiations on trade in services in the form of a negative list, and will carry out investment negotiations based on the model of pre-establishment national treatment plus a negative list.” Yuan Bo, deputy director of the Asia Research Institute of the Ministry of Commerce, told the International Business Daily that in December 2017, the second phase of the China-Korea Free Trade Agreement negotiation was officially launched, becoming the first time China has used the negative list method to negotiate service trade and investment trade agreement negotiations.
RCEP came into effect at the beginning of this year, and China and South Korea are both members of RCEP. Yuan Bo said that under the RCEP framework, China has promised to give pre-establishment national treatment plus a negative list in the investment field; although the terms of trade in services still adopt a positive list commitment, China has also promised to submit a report on trade in services within three years negative List Bid Form. “It can be said that China and South Korea have a good foundation for promoting the second phase of the FTA negotiation.”
Yuan Bo believes that the current bilateral trade in services between China and South Korea is obviously lagging behind the development of trade in goods. The two countries are highly complementary in the fields of service trade and investment, and cooperation has great potential for development. Therefore, the two sides will promote the negotiation in the field of service trade by means of a negative list in the future, which will further promote the cooperation between the two countries in the field of service trade. For example, we can conduct extensive cooperation in digital economy, environmental services, health care and education.In the field of investment, both South Korean investment in China and Chinese enterprises’ investment in South Korea are at a relatively active stage. Negotiations in the investment field will also provide better and more predictable opportunities for enterprises of both sides to further expand market access and two-way investment cooperation. The favorable business environment will help to further deepen the investment cooperation between the two sides.
It is understood that the China-Korea Free Trade Agreement has been successfully implemented in recent years. Ministry of commerce spokesperson Shu Jueting previously stated that with the joint efforts of both sides, China-South Korea economic and trade relations have developed rapidly and are each other’s important economic and trade partners. The bilateral trade volume between the two countries has exceeded 360 billion US dollars, and the total two-way investment has exceeded 100 billion US dollars. The two sides have effectively aligned their development strategies, successfully implemented the China-Korea Free Trade Agreement, steadily promoted cooperation in the joint construction of China-Korea industrial parks, and continued to deepen third-party market cooperation. A deeply integrated, stable and smooth industrial chain supply chain system has been formed.
In January this year, the fourth Joint Committee on the China-ROK Free Trade Agreement was held by video. The two sides spoke highly of the importance of the AGREEMENT for the steady development of bilateral economic and trade relations, and agreed that the Agreement has effectively promoted bilateral trade and investment exchanges and played an important role in overcoming the impact of COVID-19, maintaining the stability of the industrial and supply chains, and promoting their respective domestic economic development.
China-South Korea trade maintains rapid growth
This year marks the 30th anniversary of the establishment of diplomatic relations between China and South Korea, and the RCEP came into effect at the beginning of the year, providing a broader space for China and South Korea to further deepen economic, trade and investment cooperation.
In the first half of the year, against the backdrop of the fragile recovery of the global economy, trade between China and South Korea maintained rapid growth, fully demonstrating the resilience and potential of bilateral economic and trade cooperation. According to data from the General Administration of Customs, from January to June this year, the total foreign trade import and export between China and South Korea was US$184.2 billion, an increase of 9.4% over the same period last year. It is China’s fourth largest trading partner after ASEAN, European Union and the United States. Among them, China’s exports to South Korea increased by 18.3% year-on-year.
Yuan Bo said that the trade in goods between China and South Korea is highly complementary, and the two sides have formed a relatively close industrial chain and supply chain cooperation in the fields of electronic information industry, petrochemical, steel, textile, light industry and other fields. In general, China mainly imports electronic components, semiconductor-related materials, mid-to-high-end petrochemical and steel products from South Korea, and China exports to South Korea low-end electronic products, light industrial textiles and other labor-intensive products, as well as agricultural products. Mainly, the two sides have obvious characteristics of intra-industry trade in the fields of electronic information and chemical industry.
“The Chinese side is willing to work with the South Korean side to implement the “China-ROK Economic and Trade Cooperation Joint Plan (2021-2025)”, focus on green development, digital economy and other new fields to tap cooperation potential, implement the RCEP agreement with high quality, and further improve the level of trade and investment facilitation , to promote the healthy and stable development of China-South Korea economic and trade relations.” Shu Jueting said.