SEJONG, Dec. 21 (Korea Bizwire) - Free trade pacts between South Korea and three of its trading partners – China, Vietnam and New Zealand – went into effect Sunday, raising hopes they could boost trade and economic growth, the government said.
The Ministry of Trade, Industry and Energy said all three free trade agreements (FTA) that were signed and ratified earlier in the year went into force. Under the terms of the agreements, the countries will all lower tariffs on goods traded as of Sunday and once again on Jan. 1.
China will lower import duties on 5,779 items, with numbers for Vietnam and New Zealand reaching 272 and 1,036, respectively. Beijing will cut all tariffs on 958 items immediately, with Wellington axing import duties on 2,013 traded items.
China is South Korea’s No. 1 export market, with Vietnam ranking third after the United States. Gaining greater access to these markets can prop up outbound shipments for Asia’s fourth-largest economy at a time when growth is showing signs of slowing down.
South Korea’s growth is expected to reach just 2.7 percent in 2015, from 3.3 percent last year, while it may move up to 3.1 percent for the new year.
The ministry said the three FTAs could push up the country’s GDP by 1 percent, create some 55,000 new jobs and increase exports by US$5 billion per year.
It also said the country’s trade surplus will rise around $600 per annum,with benefits going to consumers due to the lowering of product prices reaching $15.1 billion.
In addition, the ministry said the opening of the service markets in these countries should create more business opportunities for South Korean firms in such areas as goods distribution, entertainment, legal services, environmental management and construction.
The government, meanwhile, said that it plans to offer systematic assistance to local companies so they can make inroads into China,Vietnam and New Zealand.