Recently, China and South Korea officially announced that China-ROK Free Trade Agreement (FTA) initialed text has been completed, and disclosed some contents involving tariff concessions.
In addition to greatly accelerating economic integration, the China-ROK FTA will also have multiple strategic effects:
First, global negotiations effect. It is one of the most important, the highest quality and level of the FTA signed among the world’s major economies, promoting the negotiations for the global trade liberalization and investment facilitation rules.
Second, regional cooperation effect. China ROK FTA will further urge Japan, Taiwan and other economies to accelerate or upgrade the free trade agreement negotiations with the China’s mainland economy, which is helpful to build China Japan ROK free trade zone, promoting the Free Trade Agreement negotiations in the whole of East Asia and the more inclusive and forward-looking FTAAP establishment.
Third, bilateral demonstration effect. Korea, as a US ally, reached the free trade agreement with China first, together with the subsequent FTA with Australia, it will have an important demonstration effect in the Asia-Pacific allies of the United States.
Fourth, the interconnection effects. China ROK FTA eventually make ROK involved into China’s "one belt one road", accelerating its interconnection with China and its integration into the Eurasian continent.
Fifth, bridge effect. South Korea had already signed FTA with the EU, the US and other major economies, and supports China’s Asia-Pacific free zone initiatives, and is negotiating to join Trans-Pacific Partnership (TPP), but compared with ROK’s FTA Agreement signed with other countries, China ROK FTA has the largest number of tariff preference objects. South Korean Foreign Economic Policy Research Institute predicted that the FTA Agreement would come into force in five years, South Korea's gross domestic product (GDP) is expected to enhance 1.25% at most. (www.chinainout.com)
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