Monday, September 9th, 2013
In the latest talks, Chinese and Korean negotiators divided modalities into four kinds, including goods, services and investment, rules, and economic cooperation. In the goods area, the items will be classified into three categories including normal, sensitive, and very sensitive. The degree of liberalization has been set at 90 percent in terms of number of items and 85 percent in terms of import value. Under the terms of the agreement, as many as 1,200 items, or 10 percent of all tradable goods, will be excluded from possible negotiations for tariff reduction or elimination. This is a lot more than those agreed in the Korea-U.S. (0.2%) and Korea-EU free trade agreements (0.4%).
The two parties will also discuss the issue of country of origin for goods produced in an outward processing zone (Kaesong Industrial Complex). In the services and investment area, they have agreed on the principle of national treatment (treating foreigners and locals equally) and the investor-state dispute (ISD) settlement clause. In the rules area, the negotiators have decided to include talks on issues such as intellectual property, competition, transparency, environment, and e-commerce. Korean and Chinese negotiators are expected to begin second-round talks by November.