Yonhap | 11 Aug 2010
Half of S. Korean firms concerned over China-Taiwan trade deal : survey
SEOUL, Aug 11 (Yonhap) — Nearly half of South Korean companies are worried that a trade pact between China and Taiwan could negatively affect their businesses, a survey showed Tuesday.
In June, China and Taiwan agreed to eliminate tariffs on 539 items of Taiwanese goods worth US$13.83 billion. The so-called Economic Cooperation Framework Agreement (ECFA) covers services and investments as well as competition and other issues.
According to the survey on 615 firms by the Korea Chamber of Commerce and Industry (KCCI), about 46 percent said the trade deal would have a negative impact on them. Of the surveyed firms, only 28 percent said they would benefit from the ECFA, according to the survey.
Sectors such as machinery, semiconductor and textile will be hit hard by the trade pact, the survey showed.
Industry watchers said the preferential tariffs on Taiwanese goods will undermine the price competitiveness of South Korean exports as they are subject to higher tariffs.
Seoul and Beijing are seeking to forge a similar trade deal. Both countries concluded their nearly four-year joint study on the feasibility of an FTA between the countries in May of this year.
The conclusion of the joint study, however, did not lead to an immediate launch of official negotiations for a trade deal because the countries only signed a memorandum of understanding to hold additional discussions on sensitive issues.
China is South Korea’s largest trading partner, accounting for nearly 20 percent of the country’s exports. Their bilateral trade volume reached US$73.7 billion last year, with South Korea’s exports amounting to $46.1 billion, according to the trade ministry. (Yonhap)