Seoul, Beijing agree to remove tariffs on sensitive items 10 years after FTA takes effect


Korea’s bargaining for a free trade agreement with China is picking up pace, while FTA talks between Seoul and Tokyo are unlikely to resume any time soon amid a diplomatic row over a territorial dispute.

Korea and China agreed during their third round of FTA negotiations last week to remove tariffs on sensitive items 10 years after an FTA takes effect.

The two sides agreed to eliminate tariffs on general items within 10 years after the bilateral trade pact goes into effect.

Seoul and Beijing agreed earlier to first set the sizes of the baskets for ultra-sensitive, sensitive and general items before going into anything else on the FTA.

“There was a certain amount of progress in defining the different item baskets, deciding how to handle them and setting the criteria for determining the basket sizes, which all are the basis for talks on the negotiation guidelines for goods,” Korea’s chief FTA negotiator Choi Kyung-rim said in press briefing on Monday.

“We managed to narrow the gap on applying both the number of items and the value of imports when determining the sizes of the baskets.”

The Seoul government has demanded using the amount of imports in addition to the number of items as the standards for designating each other’s sensitive items since the level of trade liberalization would be low if Beijing designates the handful of items that account for much of Korea’s exports to China as sensitive items.

The two sides are expected to define ultra-sensitive items such as rice at their fourth round of FTA talks which will be held in Korea on Sept. 10.

Discussions on service, competition policy, government procurement, intellectual property and e-commerce are also projected to show progress soon.

“I don’t know if it was because of the latest territorial disputes in Northeast Asia, but Chinese negotiators showed a more favorable attitude than before,” a member of the Korean negotiating team said.

Resumption of Korea’s FTA negotiation with Japan, however, will be difficult for a significant period of time, according to Choi.

The two sides have yet to pick a date for a follow-up meeting after their working-level consultations on June 25 to create the conditions for restarting the negotiation.

FTA negotiations between Seoul and Tokyo had begun in December 2003 and were suspended in November 2004 over differences on key issues including the agricultural and fisheries products.

“FTA negotiations play an important role in developing bilateral relations,” Choi said.

“In that regard, we can’t say the political relations between the two countries have absolutely no effect on the (FTA) talks.”

Japan would be more willing to proceed with negotiations for a three-way FTA for the time being, trade ministry officials here said.

Korea, China and Japan are expected to announce the beginning of trilateral FTA talks at the East Asia summit in November as planned, Choi said.

The three countries agreed on the basic framework for the FTA negotiation at a meeting in Qingdao, China, last week, and are scheduled to meet again after September.

Once they announce the beginning of bargaining, they will hold their first round of talks early next year.

By Kim So-hyun (sophie@heraldcorp.com)