South Korea is not fully prepared to enter free trade area (FTA)
talks with China despite such a deal being widely believed to be
positive for both economies, Shin Bong-kil, a minister with the
Embassy of?South Korea in China, said yesterday.
"Agriculture is the most sensitive sector and our biggest
concern, and the talks cannot start until more than one year
passes, when a feasibility study is expected," he said.
Zhu Hong, deputy director with the department of international
trade and economic affairs with the Ministry of Commerce, agreed
with Shin on the significance of reaching consensus on opening the
agricultural sector in promoting the progress of the FTA talks, but
said it is hard to know when that will happen.
Furthermore, the progress of the talks are likely to be impacted
by the ongoing, though stalled, US-South Korea FTA talks because of
protests from South Korean farmers, Zhu said.
On November 17, officials from China and?South Korea said a
feasibility study among governments, industries, and academies of
both sides would be launched as early as 2007. That comes on the
heels of a two-year preliminary study started in November 2004.
"There are basic results (from the preliminary study), such as
the FTA would serve to promote bi-lateral trade and enlarge the
gross domestic product of both economies. But this is only the
positive side," said Shin.
The negative side, he said, is the gap in agricultural sector
competitiveness between China and South Korea.
In?South Korea, the agricultural sector has been protected
due to high-tariffs set on imported products. Agricultural products
in?South Korea are priced 3 to 12 times higher than products
from China.
"If we lower tariffs on agricultural sector imports, disaster
would strike our agricultural sector, as it would have no
competitiveness at all," Shin said.
The recently held fifth-round US-South Korea FTA talks in late
November reached a deadlock because local farmers were strongly
against it.
"Imported agricultural products from the US sell at one-third
the price of those from South Korea, let alone imported goods from
China, so it's difficult to open the sector," said Lu Jianren, a
senior researcher at the Chinese Academy of Social Science
Institute of Asia-Pacific Studies.
Shin said that "if the US-South Korea FTA talks cannot be
brought onto a normal track, we will have to wait for an even
longer time to have China-South Korea talks."
"I am not optimistic about the talks," said Lu. "Even if
started, it will be hard to" come to an agreement.
Besides agriculture, textiles and manufacturing are also
stumbling blocks in terms of talks with South Korea, Lu said.
China has signed FTA agreements with the Association of
Southeast Asian Nations (ASEAN), Chile, and Pakistan, and is
engaged in FTA talks with other nations.?South Korea is also
promoting the FTA talks with Canada and ASEAN, among others.
But "a China-South Korea FTA would be of more significance than
the existing China-related FTAs," Zhu said.
In 2005, bi-lateral trade between the countries was US$111.9
billion, increasing by 24.3 percent year-on-year and 20 times that
of 1992. This year, the figure is expected to rise to US$130
billion.
(China Daily December 13, 2006)