Korea and China have agreed to make efforts for a bilateral free trade agreement to boost trade and further deepen economic ties, the Trade Ministry in Seoul said Thursday.
The agreement came at Wednesday’s high-level talks held on Korea’s southernmost resort island of Jeju, in which both sides shared views that a bilateral free trade pact will solidify their economic and trade relations, according to the ministry.
Their bilateral trade reached $188.4 billion last year. Both countries are expecting the volume to top $300 billion in 2015, the ministry said.
In April, top trade officials from South Korea and China agreed to create conditions for progress on a bilateral free trade deal.
Prior to that, the two countries completed a nearly four-year joint feasibility study on a possible bilateral FTA in May of last year and reached an agreement to exchange their views on sensitive issues.
A free trade deal with China would help South Korea expand its gross domestic product by nearly 3 percent as reduced trade barriers would bolster exports to the fast-growing market, a report showed earlier.
According to the report compiled by the Samsung Economic Research Institute, South Korea’s GDP is expected to grow 2.72 percent more if Seoul and Beijing complete an FTA intended to cut or remove tariff barriers between the two countries.
In Korea, there are growing calls for an FTA with Beijing as a similar trade deal between China and Taiwan has recently taken effect.
Korean President Lee Myung-bak said last year that Seoul needs to consider an FTA with Beijing in order to keep up with other nations that have been adjusting to trade conditions stemming from China’s rapid rise in the global economy.
China is the largest buyer of Korean-made goods and has contributed to Seoul’s sizable trade surplus in recent years, while Korea is China’s third-largest trading partner after the United States and Japan.