5 effects of the China-ROK FTA
- By Wang Yiwei
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E-mail China.org.cn, March 6, 2015
The pact can boost connectivity among Asian countries. With the China-ROK FTA, South Korea can take advantage of China's One Belt and One Road initiatives and accelerate its engagement with China. South Korea has retained the qualification as a founding country of the Asian Infrastructure Investment Bank (AIIB). In the future, it can move forward and integrate into the even bigger Asia-Europe market, while Japan, the United States and other Pacific Rim countries will likely miss opportunities for a Eurasian renaissance if they blindly engage in the tricks of checks and balances.
The pact will serve as a bridge between China and the United States. South Korea had already signed FTAs with the EU, the United States and other major economies. It is also a supporter of the Asia-Pacific free trade zone initiatives proposed by China. And it is negotiating to join Trans-Pacific Partnership (TPP). Among all the FTAs South Korea signed with other countries, the number of tariff preference objects in the China-ROK FTA is the largest. The South Korean Foreign Economic Policy Research Institute predicted that South Korea's gross domestic product (GDP) may increase by 1.25 percent in the first five years after the China-ROK FTA become effective.
Some Korean scholars believe that the pact will become a counterweight to the TPP proposed by the United States and will thus help dilute the influence of the United States in the region. And South Korea can also play the role of a bridge between China and the United States. The improved connectivity between China and the United States can help further accelerate Asia-Pacific economic integration.
Of course, the China-ROK FTA pose challenges for other economies, such as Japan, Taiwan, and those economies that have close trade relations with China and South Korea. However, challenges in turn can generate incentives. ASEAN is now working to establish an FTZ with China, and is working with China to promote the Regional Comprehensive Economic Partnership (RCEP) negotiations. It has played a good leading role in the negotiations.
The writer is the director of the Institute of International Affairs at the Renmin University of China. He is also a senior researcher at the Chongyang Institute for Financial Studies at the Renmin University of China.
The article was first published in Chinese and translated by Li Huiru.
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