China and South Korea Free Trade Agreement

China and South Korea Free Trade Agreement: What You Need to Know

China and South Korea have recently signed a historic free trade agreement (FTA) on June 1, 2015. The agreement is estimated to cover goods and services worth $300 billion and is expected to benefit both countries in terms of economic growth and job creation.

The FTA between China and South Korea aims to eliminate tariffs on around 90 percent of goods traded between the two countries over the next 20 years. This means that it will be easier and cheaper for Chinese and South Korean businesses to trade with each other, potentially increasing the volume of trade and boosting the overall economy.

The agreement covers a wide range of goods and services, from electronics to agricultural products. South Korea, for example, will have duty-free access to China`s fruit market, while China will gain access to South Korea`s auto parts and cultural industries.

The FTA is also expected to have geopolitical implications, as it strengthens economic ties between China and South Korea. This could potentially mitigate the tensions between the two countries over issues such as North Korea and the South China Sea.

For South Korea, the FTA with China is seen as a way to diversify its trade and reduce its dependence on the United States and Japan. It is hoped that the agreement will also create new business opportunities for small and medium-sized enterprises (SMEs) and help to boost South Korea`s competitiveness in the global market.

For China, the FTA with South Korea is seen as an important step in its efforts to strengthen its economic ties with its neighbors and to promote the Belt and Road Initiative. The agreement will also help China to diversify its trade and reduce its dependence on the United States and Europe.

However, some industries in South Korea are concerned about the potential impact of the FTA on their businesses. For example, the agriculture industry is worried about competition from cheaper Chinese imports. To address these concerns, the South Korean government has promised to provide support to affected industries.

In conclusion, the free trade agreement between China and South Korea is a significant step forward for both countries. It is expected to bring economic benefits to both sides and strengthen their geopolitical relationship. However, it is important to ensure that the agreement is implemented in a way that is fair and benefits all industries, including those that may be negatively impacted by increased competition.