Asia Pulse | Tuesday July 19, 2005
CHINA-ASEAN FTA FEARED TO HURT S. KOREA’S EXPORTS: KITA
SEOUL, July 19 Asia Pulse - The implementation of a free trade agreement (FTA) between China and the Association of Southeast Asian Nations (ASEAN) will negatively affect South Korea’s export competitiveness, a private trade promotion body said Tuesday.
The Korea International Trade Association (KITA) said the China-ASEAN FTA, which will come into force Wednesday, is expected to create the world’s largest economic bloc, with bilateral trade amounting to US$1.2 trillion.
The pact will cause disadvantages such as high tariffs for South Korean industries such as petrochemicals, textiles, shoes and electrical and electronic products, the KITA said.
More than 21 per cent of South Korean exports to China will be subject to tariffs over 10 percentage points higher than those for China-bound ASEAN shipments in 2010, when the FTA is fully implemented, the KITA said. The FTA will impose no duties on more than 90 per cent of the trade between China and ASEAN members by that time.
In 2003, China claimed 12.1 per cent of the ASEAN import market with $29.4 billion, while the latter held 11.1 per cent of the Chinese import market with $45.7 billion.
South Korea held 6.8 per cent of the ASEAN market and 10.4 per cent of Chinese market that year.
"South Korea should speed up FTA negotiations with ASEAN to lower tariffs in the region," it added.
The FTA between South Korea and ASEAN, which both agreed at the end of last year to remove duties on 80 per cent of goods traded by 2009, is expected to go into effect as early as the latter half of next year.