South Korea’s National Assembly approved the country’s bilateral free trade agreement (FTA) with China during a main session Monday.
Lawmakers of the ruling Saenuri Party and the main opposition New Politics Alliance for Democracy (NPAD) put the accord to a vote after days of intense discussions, and it passed in a 196-33 vote with 36 abstentions.
The approval still needs China’s ratification in order to take effect this year.
The two countries officially inked the deal on June 1, taking a step closer to implementing what officials here call a mutually beneficial and significant trade pact.
China is already, by far, the world’s single largest importer of South Korean goods. Trade volume between South Korea and China stood at US$290.5 billion in 2014, 22 years after they established diplomatic relations in 1992, according to Chinese data.
The trade pact has been in political limbo in the National Assembly for days as the NPAD maintained that it is necessary to take supplementary measures to support industries that will suffer from the agreement, such as the agricultural sector.
In an attempt to break the deadlock, floor leaders of the rival parties met and came up with a measure to support agriculture and fishery industries.
Under the measure, the government will provide approximately 1 trillion won (US$865 million) in direct financial support for farmers and fishermen to minimize damage from the new FTA with China.
Nearly 100 billion won will be financed from government and public enterprises over the next 10 years, according to the measure.
Immediately following its implementation, the Korea-China FTA will expand South Korea’s trade territory, represented by the combined gross domestic product (GDP) of countries with which South Korea has an FTA, from the current 61 percent to 73 percent of global GDP.
It is also expected to boost the countries’ annual bilateral trade to more than US$300 billion, a 39.5 percent hike from $215.1 billion in 2012, Seoul’s trade ministry said.
In the 10 years following its implementation, the free trade deal is expected to boost South Korea’s real GDP by 0.96 percent while creating some 53,800 new jobs.
Under the Korea-China FTA, Seoul will eliminate its import tariffs on 79 percent of all products, or 9,690 goods, from China within 10 years following its implementation.
Beijing will do the same on 71 percent of all products, or 5,846 items, from South Korea over the cited period.
In the 20 years after the FTA goes into effect, South Korea will have eliminated its tariffs on 92 percent of all products from China, with China eliminating its tariffs on 91 percent of all products from South Korea.
The electronic signboard at the National Assembly in Seoul shows lawmakers` voting results on South Korea-China free trade agreement (FTA), with 196 ayes and 33 nays, on Nov. 30, 2015. Thirty-six abstained. The trade pact was officially signed on June 1, but ruling and opposition parties have been wrangling for months over the extent of assistance to industries that will be hurt by the FTA, mostly the agricultural sector.