The South Korean government said Friday that it has asked the parliament to ratify the country’s bilateral free trade agreement with China that was signed earlier in the week, apparently demonstrating its firm resolution to quickly implement what it has called one of the most significant trade deals it has ever signed.
The government bill on the ratification of the Korea-China FTA was submitted to the National Assembly on Thursday, along with similar bills for the ratification of the country’s bilateral free trade pacts with Vietnam and New Zealand, according to the Ministry of Trade, Industry and Energy.
The move came only four days after the country officially inked the Korea-China FTA.
“The government plans to do its utmost to enact the three FTAs before the end of the year and help realize benefits from the free trade pacts at an early date,” the ministry said in a press release.
The bilateral FTA with Vietnam was signed last month with the Korea-New Zealand FTA signed in late March.
The unusually swift move to have the Korea-China FTA ratified comes as Seoul is struggling to boost its exports, which have posted an on-year drop for five consecutive months since the beginning of the year.
China is already the world’s single largest importer of South Korean products, accounting for over 25 percent of South Korea’s overall exports last year.
According to the outcome of a government study on the economic impact of the Korea-China FTA, the deal is expected to help boost the country’s gross domestic product by 0.96 percent over the 10 years following its implementation.
Such a figure compares with estimated 0.01 percent and 0.03 percent gains in GDP from the Korea-Vietnam and the Korea-New Zealand FTAs, respectively.
The Korea-China FTA is expected to have a greater impact on the South Korean economy than most of the other free trade deals the country has enacted, also in terms of job creation.
In the 10 years following its enactment, the Korea-China FTA is expected to help create 53,800 new jobs here while the FTAs with Vietnam and New Zealand are expected to lead to 671 and 952 new jobs, respectively, over the same period.
However, damage from the Korea-China FTA to the local industry, especially the agricultural and fisheries sectors, will be similar to or even less than those from the free trade pacts with Vietnam and New Zealand, according to the ministry.
Once the Korea-China FTA is implemented, total output by South Korea’s agricultural and fisheries sectors are expected to be cut by an annual average of 7.7 billion won ($6.94 million) and 10.4 billion won ($9.37 million) over the next 20 years.
The Korea-New Zealand FTA, on the other hand, is expected to cause a 23.7 billion-won cut in total output by the country’s agricultural sector each year for the next 15 years, along with a 2.1 billion-won reduction in output by the fisheries industry.
The Korea-Vietnam FTA is expected to cause a reduction of 4.7 billion won and 5.4 billion won in output by the agriculture and fisheries industries, respectively.
To help minimize damage from the new FTAs with China and Vietnam, the government will provide up to 513.5 billion won in direct financial support for farmers and fishermen over the next 20 years, with an additional 544.7 billion won to be offered as special low-interest loans over the 10 years following their implementation.
To deal with possible damage from the Korea-New Zealand FTA, the government plans to spend 355.8 billion won in financial support for those engaged in the farming and fishing industries over the next 15 years following its implementation, along with
352.3 billion won in special loans in the 2016-2024 period, the ministry said. (Yonhap)
