China and South Korea are expected to sign a landmark Free Trade Agreement (FTA) in the first half of this year, the Chinese Ministry of Commerce (MOC) said on Wednesday.
The ministry says that China has completed the "initializing" process. Initializing is the step that comes after wrapping up negotiations and before the official signing.
Under the accord, which will be the biggest ever FTA that China has entered into, South Korea will eliminate tariffs on 92% of all products from China within 20 years. In return, China will abolish tariffs on 91% of all South Korean goods.
The agreement covers 17 areas, ranging from goods and services, investment and trade rules, and topics such as e-commerce and government procurement. But auto and auto components and certain S. Korean agricultural products such as rice, chilly pepper and garlic are not included in the deal.
The negotiations on the deal began in May 2012. Thereafter, at a meeting in Beijing in November 2014, the leaders of the two countries said that they had come to a “substantive” conclusion on the terms.
There were about 130,000 Chinese people visiting South Korea during the Lunar New Year.
Trade between China and South Korea has been rising steadily over the years. In 2004, China became South Korea’s largest trading partner. Bilateral trade then hit $228.9 billion, as of 2013.
The FTA is expected to boost the figure further, with new investments being made in hi-tech industries and with goods such as South Korean cosmetics, which are much sought-after in China, becoming cheaper.
