What benefits will the completion of negotiations on the China-ROK Free Trade Area bring?

According to the website of the Ministry of Commerce, on February 25, 2015, China and South Korea completed the initialing of the entire text of the China-South Korea Free Trade Agreement (FTA) and confirmed the content of the agreement. At this point, the China-ROK free trade area negotiations have been completed.

"Will the price of Korean goods drop?" "What kind of trade should be done with South Korea?" After "China-South Korea Free Trade Area" became a hot word, ordinary people were very concerned about whether they could buy it in the future. Korean products are affordable, and entrepreneurs are more interested in the business opportunities that come with it. Experts believe that the prices of Korean mobile phones, TVs, cars and other commodities are expected to drop in the future, and people can also buy cheaper Korean cosmetics, clothing and other daily necessities.

The scope of the agreement covers 17 areas

The introduction on the website of the Ministry of Commerce shows that according to the results of the China-South Korea Free Trade Area negotiations, in terms of the level of openness, the liberalization ratio of both sides’ goods trade exceeds “ 90% of the tax items and 85% of the trade volume.” The scope of the agreement covers 17 areas including trade in goods, trade in services, investment and rules, including "21st century economic and trade issues" such as e-commerce, competition policy, government procurement, and environment.

At the same time, the two sides promised to continue service trade negotiations in the negative list model after the signing of the agreement, and to conduct investment negotiations based on pre-establishment national treatment and negative list models. The China-ROK free trade area negotiations have achieved the goal of “generally balanced, comprehensive and high-level interests”.

According to South Korean media reports, the China-South Korea Free Trade Agreement is expected to help the bilateral trade volume between the two countries exceed US$300 billion, an increase of 39.5% from US$215.1 billion in 2012. The combined GDP of regions that have signed free trade agreements with South Korea will account for 73% of global GDP from the current 61%.

The formation of an 11 trillion U.S. dollar domestic market

China-South Korea free trade area negotiations were launched in May 2012. In November 2014, the heads of state of China and South Korea jointly announced the end of substantive negotiations in Beijing. The Ministry of Commerce stated that this is China’s free trade agreement with the most comprehensive scope and the largest volume of national trade to date.

The conclusion of the China-South Korea FTA will accelerate the competitiveness of Korean companies, especially Korean small and medium-sized enterprises, to enter the Chinese market. According to analysis, among small and medium-sized enterprises, the industries that benefit from the signing of the China-South Korea FTA will mainly focus on medical equipment, clothing, small household appliances and other product fields.

Some predictions point out that the China-South Korea Free Trade Zone is expected to contribute 1-2 percentage points to China’s GDP growth, while South Korea’s GDP will increase by 2%-3%. By then, the relationship between China and South Korea will be It is a global market with a population of 1.35 billion and a GDP of US$11 trillion.

It will be cheaper to buy Korean cosmetics at your doorstep

The "2013 Korean Tourism Market Analysis" released by the Korea Tourism Organization (Tourism Development Bureau) shows that the number of Chinese tourists traveling to South Korea in 2013 reached 4.32 million people visited South Korea, and purchasing Korean cosmetics was the first choice for people traveling to South Korea. Because for the same brand of cosmetics, the prices in South Korea and domestic prices can be described as worlds apart.

After the signing of the China-South Korea Free Trade Agreement, more than 90% of the products of both parties will have zero tariffs after the transition period, including Korean cosmetics and clothing. For the Chinese people, it means that more Korean products will enter the Chinese market. People can buy a variety of Korean products in China without going to South Korea, and the prices are not much different from those in South Korea.

China’s exports of agricultural products will increase significantly

“In China-South Korea trade, South Korea imposes very high tariffs on the import and export of agricultural products. With the launch of the China-South Korea Free Trade Area, tariffs The gradual reduction will promote China's exports of agricultural and sideline products," said Lin Guijun, vice president of China University of International Business and Economics.

The relevant person in charge of the Qingdao International Agricultural and Sideline Products Trading Logistics Port said, “Local cabbage, ginger, onions, okra, peppers, and garlic are all agricultural products favored by Japanese and Korean people. We have been formulating targeted policies before. Japan and South Korea’s trade plan. Now that the China-South Korea free trade agreement negotiations are completed, we believe that our exports of agricultural and sideline products to South Korea will greatly increase.” Some are happy, some are sad." For Chinese companies, through the conclusion of the China-South Korea Free Trade Agreement, they can sell more advantageous products to South Korea and expand their sales markets. Among them, electronic products with relatively low prices and competitive advantages will enter the Korean market in a big way.

The entry of Chinese products with price advantages into the Korean market is a huge blow to Korean small and medium-sized enterprises that lack competitiveness. However, for Korean companies, the conclusion of the China-South Korea Free Trade Agreement means that they are connected to the Chinese market with a population of 1.3 billion. Relevant people in South Korea said that South Korea's economic territory will become the third in the world.