China urges free trade pact with South Korea
Source: AFP/The Australian Date: 2006-05-29
SEOUL - China has urged a free trade agreement (FTA) with South Korea in order to help boost burgeoning trade and investment between the two countries, officials said.
The suggestion came as Chinese Commerce Minister Bo Xilai met with his South Korean counterpart Chung Sye-Kyun, officials of the Ministry of Commerce, Industry and Energy said.
Bo stressed the need to push forward free trade agreement talks. Beijing seeks an FTA with Seoul to help ease its chronic trade deficit with South Korea.
Bo raised the same issue when he met with South Korean Trade Minister Kim Hyun-Chong here Friday, according to the Ministry of Trade and Foreign Affairs.
South Korea is reluctant to rush into an FTA with China amid fears that low-priced Chinese agricultural products could flood the domestic market, causing trouble for the country's already impoverished farmers.
South Korea and China have agreed to make efforts to double bilateral trade to US$200 billion per year by the year 2012.
Bo also expressed concern over what he called a militant union at Ssangyong Motor, which was acquired by Shanghai Automotive Industry Corp. in October 2004.
Shanghai Motor bought a controlling stake of 48.9 percent in Ssangyong for US$500 million, becoming the first Chinese firm to own a major concern in the world's fifth-largest auto market.
China targets agriculture in trade deal
China has vowed to include agriculture and other tough sectors in a free trade agreement with Australia.
Chief negotiator Zhang Xiangchen said agriculture, services, government procurement and investment would all be covered in a free trade agreement (FTA) under negotiation.
Canberra's increasingly warm political links with Beijing had played an important role in framing China's commitment to choose Australia for its "most complicated, important and comprehensive" bilateral trade deal to date, he said.
"Five years after joining the World Trade Organisation, we need to take another big step forward in trade, and it is good for us to have this experiment with Australia rather than with other developed countries," he told The Australian.
Speaking on Friday after talks with Australian officials in Beijing, Dr Zhang said that at the next round in September the countries would discuss the size of the deal each will seek and concede on manufactured goods and agriculture.
Exports to China soared 46 per cent to $16 billion and imports grew 19 per cent last year, when China overtook the US to become Australia's second-largest trading partner after Japan.
On resources, which dominate Australia's exports to China, Dr Zhang said: "We don't need to spend a lot of time in the FTA on this. It's quite obvious all the tariffs will go to zero."
Agriculture, he said, would be easier for China to settle than services, in part because it was easier to forecast the capacity of Australia's farmers, and thus the trade impact.
"You have very good quality of products and good price and good potential in agriculture, in grains, sugar, wool, cotton and other products - land-intensive products. And we are very interested in horticulture exports to Australia.
"We assume that after the FTA we shall export more manufactured products. But much depends on the development of Chinese industry in the context of globalisation. Location and production and marketing are now quite global, and many Chinese producers, for instance of cars, are joint ventures, and are subject to global strategies."
He said that "after a long debate, we agreed everything should be put on the negotiating table", including investment, though to provide Australian investors with easier access would involve "fundamentally changing the current regime involving hundreds of laws and thousands of domestic regulations".
Talks began a year ago, but the first four rounds comprised an exchange of information rather than negotiations. Last week, Australia led the shaping of future talks by tabling the 15 chapters likely to be included in the final agreement, though without many of the crucial figures.
