Korea and China have initiated follow-up negotiations to expand market access in the service and investment sectors under their free trade agreement (FTA). While trade in goods between the two countries amounts to $270 billion, service trade is limited to $38.8 billion. The aim is to enhance the level of openness in high-value service sectors such as audiovisual and finance, thereby broadening economic cooperation.
The Ministry of Trade, Industry and Energy announced that the 17th round of follow-up negotiations for the Korea-China FTA service and investment sectors is taking place in Seoul from October 12 to 16. The negotiations involve a delegation of over 30 representatives from both countries, led by Kwon Hye-jin, Director of Trade Negotiations at the Ministry, and Chen Qiao, Director of the International Department at the Ministry of Commerce of China.
The follow-up negotiations aim to expand the trade relationship, which has primarily focused on goods, into the service and investment sectors. The two countries agreed to pursue further liberalization in these areas when the FTA came into effect in 2015, with the first round of negotiations commencing in March 2018.
Currently, the scale of goods trade between Korea and China is approximately $270 billion, while service trade stands at about $38.8 billion. The proportion of service trade compared to goods trade with China is 14.2%, which is 9.6 percentage points lower than the 23.8% share of service trade in Korea's total external trade.
In light of this trade structure, the government plans to focus its negotiation efforts on achieving tangible market opening results in sectors such as audiovisual and finance. Discussions are underway to clarify the sectors and market entry requirements for Korean companies looking to enter the Chinese service market, as well as to enhance the predictability of regulations.
The frequency of follow-up negotiations for the Korea-China FTA has increased recently. According to the Ministry, after the 9th round of negotiations in October 2020, the 10th official negotiation was not held until January 2025. Subsequently, the 11th and 12th rounds took place in April and June of last year, respectively, followed by the 13th to 16th rounds in January, April, June, and August of this year.
During the 16th round of negotiations held in Beijing from August 31 to September 4, the two countries also discussed market access in the service, investment, and finance sectors. At that time, they agreed to expand mutual service access sectors and improve the clarity and predictability of market entry conditions to facilitate service trade and investment.
Including the current 17th round, there have been five official negotiations this year alone. After a prolonged hiatus in official negotiations since 2020, the two countries are now intensively discussing market access in the service and investment sectors.
This round of negotiations is expected to focus on enhancing market access levels in areas of mutual interest and improving conditions for corporate entry. However, the follow-up negotiations have been ongoing for over eight years since they began in 2018. The mere holding of negotiations does not guarantee an agreement on market opening, making it crucial to determine the specific scope of openness and the content of any agreements reached.
Kwon Hye-jin, Director of Trade Negotiations at the Ministry, stated, "We will strive to achieve practical results in sectors such as audiovisual and finance based on the principle of reciprocal market opening, improving conditions for our companies to expand overseas. We will diligently continue discussions on areas of mutual interest to derive negotiation progress that aligns with national interests and further strengthen the foundation for economic cooperation between the two countries."
* This article has been translated by AI.
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