SEOUL — South Korea’s finance minister called Monday for early negotiations on a free trade pact with China so Seoul can compete against Taiwan in the lucrative Chinese market.
Bahk Jae-wan said a sweeping China-Taiwan free trade agreement signed last year will put South Korean firms, which compete against Taiwanese firms in many sectors and most notably information technology, at “a great disadvantage.”
“The range of products to benefit from the China-Taiwan FTA will be greatly expanded beginning this year, putting South Korea in a very unfavorable position,” he told reporters.
More than 90 percent of Taiwan’s exports will benefit from the trade pact with China, Bahk said, saying Seoul must strike a similar deal to compete in the rapidly-growing mainland consumer market.
“It is inevitable that we take necessary domestic steps (for the FTA with China) as soon as possible, also for mutual relations with China,” he said.
China is South Korea’s largest trading partner. Two-way trade is expected to reach US$300 billion by 2015 compared with US$224.8 billion in the first 11 months of 2011.
The two countries agreed to start formal talks on a free trade agreement as soon as possible when South Korean President Lee Myung-bak visited Beijing this month.
Bahk called it a “pressing issue” to increase intra-regional trade in Northeast Asia, saying trade among China, Japan and South Korea accounts for only 22 percent of their total trade volume.
That compares to more than 40 percent among members of the North American Free Trade Agreement and more than 60 percent within the European Union, he said.