South Korea ratifies free trade agreement with China

South Korea placed its free trade agreement with China in Beijing’s hands Monday, after lawmakers held up the South’s side of the bargain.

The support bill promises 1 trillion won (US$865 million) in direct financial support to minimize damage to farmers and fisherman.

Negotiations for the agreement, which began in 2012, had often been marred by angry protests from South Korean farmers who fear an influx of cheap Chinese imports.

Flags of China and South Korea.

China, meanwhile, excluded or delayed the opening of its relatively less-developed manufacturing segments, such as the auto sector and display panel production.

China is already South Korea’s primary trading partner, receiving a quarter of its exports, and South Korea is China’s third-largest trading partner.

Economic cooperation between China and South Korea has expanded in the past 23 years since the two countries set up diplomatic ties in 1992.

The ratification, which comes five months after the trade pact was signed, paves way for the deal with South Korea’s largest export market to take effect this year.

Yonhap News Agency reports that in the same session Monday, the National Assembly additionally approved bilateral FTAs with New Zealand and Vietnam.

Immediate elimination of tariffs on most of the products, around 40 percent, would occur in the first stage after the FTA goes into effect, likely next year.

Asia’s fourth-largest economy, South Korea, has been struggling to improve exports, which saw its biggest drop in six years after dropping by 16% in October from a year earlier.

The countries implemented their bilateral FTA for products in May 2013 after they failed to narrow differences in the service and investment sectors.

Deng said he hoped the cross-strait trade-in-goods pact could see a major breakthrough, but he added that this will not depend on Taiwan alone and will be down to the attitude of the other side, and whether the two sides can reach a point of balance on the items to be included.

It will also prohibit any type of restrictions on market access while also requiring both countries to streamline their regulations with global norms.