Seoul, Beijing initial free trade pact despite skepticisms over effects

Just one of South Korea`s top 10 exports to China would benefit from Beijing`s lifting of tariffs immediately after a bilateral free trade agreement takes effects. In addition, the pact would immediately remove tariffs on just 5.2 percent of the value of South Korea`s total exports to China, causing skepticism about the actual effects of the trade deal.

The two neighboring countries have initialed their FTA and exchanged the English versions of the trade pact through a diplomatic channel, according to the Ministry of Trade, Industry and Energy on Wednesday. After the two countries concluded the negotiations for the deal in November last year, government representatives from both sides discussed the wording of the pact and conducted legal reviews. The recent initialing of the agreement is an official completion of the negotiation process.

It seems that even if the Seoul-Beijing FTA takes effect, the low level of market opening for major trade goods of both countries would not bring down the tariff barrier significantly. Among South Korea`s top 10 exports to China in accordance with the Harmonized System code, a universally accepted classification system for traded goods, "diesel oil and other petroleum products including aviation kerosene and paraffin" is the only item whose tariff would be lifted immediately by the FTA`s effectuation. China`s top-nine exports to South Korea are either already tariff-free or will have to wait for 10 years until the tariffs are removed.