China, South Korea Close to Signing Free Trade Agreement

China and South Korea on November 10 signed a “substantial conclusion” of a free trade agreement to substantially remove obstacles to commerce between the two countries, with the exception of auto industry and rice, Reuters reports.

Leaders from both sides confirmed that two-year negotiations have been concluded. South Korea is optimistic that cutting of the import tariffs will translate to the country’s clothing, leisure and high-end electronics manufacturers becoming competitive in China. South Korea’s official said that the country intentionally focussed on small to medium-sized businesses, shying away from matured markets such as steel and petrochemicals.

The deal, covering 17 areas including government procurement and e-commerce, was signed by Chinese President Xi Jinping and South Korean President Park Geun-hye, and is now subject to legal and parliament reviews in the two countries.

South Korean side said that the exclusion of auto industry from the deal was greeted by the country’s car and car-parts producers, saying that they ”were concerned about the potential flooding of Chinese-made products into the country for the long term.”