Presented by Gersande,
Produced by Think-Tanks’TV.
KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY
KIEP advises the government on all major international economic policy issues and serves as a warehouse of information on Korea’s international economic policies.
Their website: kiep.go.kr .
Jong Duk KIM
After 14 bilateral meetings lasting for about 30 months, South Korea and China finally settled on an FTA deal last November, 2014. Following the official procedural process, the agreement was initialed in February 2015 and South Korea officially signed its bilateral Free Trade Agreement with China on June 1, 2015.
As announced in the media, the Korean government plans to submit a ratification bill to the National Assembly before the end of 2015.
Notwithstanding all the administrative work being undertaken at this moment, this is not the end of the Korea-China FTA. Indeed, both countries agreed to resume a second-stage negotiation on services and investment liberalization in two years after the current first stage agreement takes effect.
Considering the growing importance of services and investment in FTAs, one may say that the Korea-China FTA is only halfway to its final destination.
For the last five years China has experienced fast growth in the services sector at around 8% ~ 10%, which was above China’s annual GDP growth rate. Accordingly, the services export from Korea to China expanded immensely.
The Chinese government is looking for economic growth momentum inside the country, and hence the economic policies are focusing more on service sector development. Under such circumstances, Korean firms have sought to adjust their strategies correspondingly with the aim of securing access to the Chinese domestic service market.
In this regard, the Korea-China FTA is hoped to help and guide Korean firms adapting to drastic changes in the Chinese economic environment.