July 19, 2014
SEOUL – South Korea and China yesterday agreed “in principle” on a way of liberalizing mutual service and investment during the negotiations for a bilateral free trade agreement (FTA), Seoul’s trade ministry said.
Negotiators from both sides held the 12th round of talks from Monday to yesterday in South Korea’s southeastern city of Daegu, according to the Ministry of Trade, Industry and Energy.
During the talks, the two sides reached an agreement “in principle” on how to liberalize service and investment
Positive, negative
As for the service sector, South Korea has called for a negative way of liberalization, which stipulates the list of unopened sectors. China has demanded the positive way of liberalization, which lists open areas.
The two sides agreed to adopt the positive way of service liberalization when the free trade pact comes into force, and later hold follow-up talks to change it to the negative way of liberalization, which is more comprehensive.
As for the investment, Seoul has called for liberalization of investment, while Beijing has demanded the inclusion of investment protection alone.
With this round of talks, the two sides agreed to draw up a free trade deal, which stipulates the already-adopted topics on investment liberalization as well as regulations on investment protection. After the deal takes effect, the two nations will hold follow-up negotiations to reflect factors of investment liberalization in a negative way.
For the goods sector, the two sides made efforts to narrow differences on liberalization the manufacturing industry in China and opening the agricultural market in South Korea.
Seoul and Beijing will hold the 13th round of FTA talks in September in China, with detailed schedules set to be discussed later.
Yesterday South Korea announced that it would scrap rice import caps from next year, but said high tariffs would be imposed to prevent a damaging surge in imports that would hurt local farmers.
The decision to open the market was forced by the imminent expiry of a two decade-old deal on rice import quotas that South Korea had secured with the World Trade Organization (WTO).
Even though the move was expected, it remains a divisive and extremely sensitive political issue that will be met by angry opposition among farmers’ groups, who began a pre-emptive protest on Thursday outside the main government complex in Seoul.
South Korea media reports have suggested the tariff, which will have to be verified by the WTO, could be anywhere between 300 and 500 per cent, but farmers fear this would be allowed to slowly erode over the years.
(Xinhua/AFP)