China and South Korea have announced the “initialization” of their free trade agreement (FTA) with the concluding of FTA negotiations, China’s Ministry of Commerce (MOC) said in a brief statement on its website.
China and South Korea began FTA talks in May 2012.
Chinese President Xi Jinping and his Korean counterpart Park Geun-hye confirmed in Beijing last November a substantive conclusion in negotiations.
The FTA will cover 17 areas, including trade in goods and services, investment and trade rules, and topics such as e-commerce and government procurement.
The MOC said in November last year that the agreement will be signed in 2015 and take effect in the second half of the year.
China is South Korea’s largest trading partner. Trade between the two countries has increased 35 times, from $6.37 billion in 1992 to $230 billion in 2013.
The FTA between Beijing and Seoul is expected to boost South Korea’s participation in the RCEP trade talks. Regional Comprehensive Economic Partnership (RCEP) is an initiative to link the ten ASEAN member states and the group’s Free Trade Agreement partners, Australia, China, India, Japan, South Korea and New Zealand.
If negotiated successfully, RCEP would create the world’s largest trading bloc.
The two currencies can now trade directly, cutting out the US dollar.