SEOUL (AFP) – South Korea and China said Monday they had effectively secured a free trade agreement to remove tariffs on over 90 per cent of goods, although some details remained under negotiation.
The announcement came after South Korean President Park Geun-Hye met Chinese President Xi Jinping on the sidelines of the Apec summit in Beijing.
Park’s office said the two countries had “effectively reached” a deal, which Xi described as one of “landmark importance.”
A South Korean government statement made it clear that differences remained over a few unspecified “details” that would have to be bridged before the FTA could be signed.
Any final document would require the approval of both national legislatures.
South Korea’s deputy trade minister Woo Tae-Hee said there was little possibility of changes to any major clauses in the current agreement.
“A substantial conclusion of negotiations can be seen as a complete conclusion,” Woo was quoted as saying by the Yonhap news agency.
The statement said the FTA would remove tariffs on 92 per cent of Chinese goods imported to the South and 91 per cent of the South’s goods imported to China within 20 years.
China is currently South Korea’s biggest trading partner and export market, and two-way trade stood at around $228.8 billion last year.
Exports to China – the world’s second-largest economy – totalled $145.8 billion in 2013, more than a quarter of the South’s total overseas shipments.
The two neighbours started trade negotiations in 2012 but progress has been delayed by differences on the extent of market-opening.
There have also been protests from Korean farmers who fear an influx of cheap Chinese imports.
The South Korean statement said the FTA would exclude a number of farm products like rice, meat and pepper – which account for 30 per cent by value of agricultural imports from China.
“The latest FTA will help us secure an opportunity to tap into the vast Chinese market,” the statement said, estimating bilateral trade would grow to $300 billion in 2015.
The deal also removes many regulatory restrictions in services, investment, finance and culture, making it easier for companies to form joint ventures and cooperate.