On June 1, 2015, China and South Korea signed a free trade agreement that entered into force on December 20, 2015.   In his letter to Xi, Park called the agreement „a historic milestone in countries` efforts to deepen their strategic partnership of cooperation,“ Yonhap News said. Similarly, Xi hailed the free trade agreement as a „monumental event“ that „will not only lead to a new leap in trade relations between the two countries, but will also bring practical benefits to the citizens of the two countries.“ The agreement was formalized on November 10, 2014.  South Korean President Park Geun-hye said her government would strive to enter into force as soon as possible.  Of all the free trade agreements concluded by Korea with its major trading partners since the turn of the century, the free trade agreement between Korea and China could be the most important in terms of trade. However, it is far from the best in terms of the depth of liberalization and the extent of trade and investment policy commitments. Korea and China have agreed to liberalize much of bilateral trade within 20 years, but both sides have agreed to important waivers of basic customs reforms and postponed important negotiations on market access for services and investment for several years. Political interests have exceeded economic targets and the outcome of the negotiations has cut too many corners to achieve such a comprehensive result. The limited outcome of the Talks between Korea and China has two clear implications for the economic integration of Northeast Asian countries. First, the prospects for the ongoing talks between China, Japan and Korea will be limited and will probably not exceed the outcome between Korea and China. Second, Korea and Japan need to strengthen their bilateral stage of northeast Asian trilaterals and how best to negotiate an agreement under the Trans-Pacific Partnership. The agreement was reached more than six months ago, in November 2014. On the sidelines of the APEC meeting in Beijing, Xi and Park announced that negotiations for an agreement should eliminate tariffs on 90 percent of goods traded between China and South Korea.
Now that it has been officially signed, the free trade agreement is expected to come into force before the end of the year, once both lawmakers approve it. With a view to market opening, China and South Korea will treat each other`s financial enterprises entering their own capital markets, which means that the corresponding authorisation procedure will be simplified and barriers to entry for both sides into the financial markets will be reduced. The agreement also provides that Korean construction companies in the Shanghai Pilot Free Trade Zone can order cooperation projects from Shanghai, without being limited by the share of foreign investment (foreign investment accounts for more than 50%).
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