Korea and China are set to announce the beginning of negotiations for a bilateral free trade agreement as early as Wednesday since the two countries’ top trade officials are in final discussions in Beijing.

Korea’s Trade Minister Bahk Tae-ho flew to Beijing on Tuesday for talks with Chinese Commerce Minister Chen Deming and Bahk is scheduled to return home on Thursday.

The two sides recently reached an agreement on the draft of a joint statement on the beginning of FTA negotiations, according to government officials in Seoul.

“As promised in the Korea-China summit talks on the sidelines of the Nuclear Security Summit in March, the two countries will announce the start of FTA negotiations in May,” a senior government official said. “The official announcement could take place as early as Wednesday.”

But with four Korean patrol officials attacked and severely injured by Chinese fishermen on Monday, Seoul was also reviewing the possibility of postponing the announcement of FTA talks to next week.

The Seoul government completed all internal procedures required to start the FTA negotiations with China two weeks ago.

Korea will place top priority on the bilateral trade pact talks with China over those with Japan, which have been suspended, and those with China and Japan, officials here said.

President Lee Myung-bak and his Chinese counterpart Hu Jintao are expected to pledge efforts for a successful free trade agreement in their summit talks around mid-May.

The FTA negotiations with China will be carried out in two stages, the first of which will be on settling the sizes of baskets for general, sensitive and ultra-sensitive items. The second stage of talks will not proceed unless the two countries reach an agreement in the first stage.

Bahk has vowed to do his best to get agricultural and fisheries products categorized as sensitive or ultra-sensitive items.

“Since Korea and China share the West Sea and are geographically close, an opening of the agricultural and fisheries market would have a major ripple effect,” Bahk said, adding that Seoul has a general outline on which products should be sensitive items and how they should be handled.

If the two countries conclude the free trace pact, it is expected to greatly affect the Korean economy. China is Korea’s largest trading partner and trade between the neighboring countries is forecast to reach $300 billion by 2015.

Officials in Seoul said the bilateral trade agreement will further boost investment and trade, but some experts expressed concerns that the FTA with China will devastate Korean agriculture.

According to an institute report, damage to Korea’s farming industry from a free trade agreement with China may reach up to $2.8 billion a year.

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