South Korea and China's Free Trade Agreement Goes Into Full Effect On December 20; Both Countries Are Hoping For Maximized Benefits Through Tariff Reduction on Exported Products

South Korea and China's bilateral Free Trade Agreement (FTA) will go into full effect starting Dec. 20, as both countries aim to cut export tariffs and remove other trade barriers to maximize benefits. Seoul officials said Wednesday the two nations formally signed FTA after three years of negotiations.

Korea Herald reported Wednesday that South Korea and China exchanged diplomatic letters in Beijing, with South Korea represented by Ambassador Kim Jang Soo and China by assistant commerce minister Wang Shouwen, to mark the finalization of the FTA. This comes a week after the South Korean parliament made the necessary amendments to the bill despite opposition from rival parties.

According to Yonhap News, although China remains to be South Korea's biggest trade partner, exports from South Korea to China slid down for the fifth straight month as China's economy rapidly cools.

With the FTA going into full force, Wang hopes to see an improvement in terms of trade between South Korea and China.

"In the year 2016, I hope that bilateral trade can show an upward movement as the China-South Korea free trade deal comes into force," Wang stated.

South Korea's Trade Ministry said, "The two sides have consistently worked for a swift implementation of the deal based on the common goal of lifting barriers within this year."  

The first tariff reduction will be implemented on the day the FTA goes into effect, followed by another round of tariff cuts on New Year's Day.  

Under the Free Trade Agreement, Seoul and Beijing will eliminate tariffs on as much as 90 percent of trade goods within 20 years of the pact's operation.

Xinhua News noted that through the FTA South Korea is expecting its gross domestic product (GDP) to increase by 0.96 percentage points and open around 53,8000 job opportunities over the next 10 years.