BEIJING/SEOUL (Reuters) – Chinese and South Korean leaders on Monday signed a „substantial conclusion“ to a free trade agreement that will drastically reduce trade barriers between the two trading giants, but leaves trade sanctions on rice and cars. However, the signatories` declaration left the door open for India to join the trading bloc and said it would be „welcome“. Australia, Japan, New Zealand and South Korea signed the agreement with members of the Association of Southeast Asian Nations (Asean), including Indonesia, Malaysia, the Philippines and Thailand. BEIJING – After eight years of talks, China and 14 other nations, from Japan to Myanmar to New Zealand, officially signed one of the world`s largest regional free trade agreements on Sunday, a pact that was partly marked by Beijing to counterbalance U.S. influence in the region. China and South Korea will sign a free trade agreement aimed at removing most trade barriers between countries. Negotiations on the agreement began in May 2012.  There were 12 roundtables until July 2014.  In 2019, the total GDP of the signatories was $26.2 billion (20 Tn), or about 30% of the world`s GDP. The agreement will cover nearly 28% of world trade. Trade and investment flows into Asia have increased significantly over the past decade, a trend that has accelerated amid wrangling between the United States and China, where the two superpowers have imposed billions of tariffs on each other`s exports. Chinese President Xi Jinping and South Korean President Park Geun-hye signed the agreement, which clarified all bilateral trade issues and now faces legal and parliamentary audits in both countries.
The agreement is due to be signed on Monday and includes 17 areas such as e-commerce, Chinese government officials said. China has tried to enter this void. Nevertheless, it must face India`s ambitions. India`s relations with China have deteriorated considerably in recent months amid clashes between troops on the mountainous border. Although China and South Korea have other free trade agreements on their books, this agreement is of unique importance. China is already South Korea`s largest trading partner and Seoul expects the agreement to produce one-off dividends across trade relations. The free trade agreement with South Korea is also China`s largest of its kind in terms of trade volumes. In 2013, according to the government, South Korea recorded a $3.8 billion deficit in land, forest and livestock trade with China.
South Korea has had a trade surplus with China since 1993 and the surplus was $62.8 billion, according to South Korean data last year. The P.T. did not include China, but included many of its major trading partners, such as Japan and Australia, as well as Chinese neighbours such as Vietnam and Malaysia. After President Trump pulled the United States out of the agreement, the other 11 countries made progress on their own. Trump had previously threatened to withdraw U.S. troops if his demands were not met, and the editorial accused the president of treating the Korean-U.S. deal as a „real estate deal to make money.“ There is also irritation over Washington`s pressure on the South for Seoul to sign an extension of a three-way agreement on the exchange of military information with the United States and Japan.