Wed 24 August 2016
By Dr. Heng Wang
Among China’s FTAs, the China-Korea FTA deserves attention. It is one of the deepest China’s FTAs, although it is not comparable with larger trade pacts. Korea is also one of the major trading partners of China. Moreover, the China-Korea FTA is one of the two most recent FTAs of China that were concluded in 2015 (the other one is the China-Australia FTA).
The China–Korea FTA presents two important questions, which would be highly relevant to the understanding of China’s approach to regional integration. What are the characteristics of the China–Korea FTA? And what are their underlying considerations and implications?
For these questions, here are some of my views regarding the China-Korea FTA. First, the China–Korea FTA is characterized by expanded coverage, highlighted focus on services and investment, increased non-trade concerns of competition and environment, and enhanced good governance norms. Generally, the features are not fully developed largely due to the gentle pace of the China-Korea FTA. Among the features, good governance is more salient than others.
Second, these features may be attributable to a variety of factors, particularly the response to trade practice and disputes, the impact of other trade agreements, and the need of economic transformation of China.
Third, these characteristics may face challenges particularly those regarding the implementation and interpretation of relevant obligations. These challenges include the interpretation of soft-law obligations, the implementation of the FTA at the local government level, and the relationship between different FTA chapters, just to name a few.
Finally, these traits may represent some of the future direction of China’s FTAs, and the goal of a high-level FTA will remain a guiding force. New development will be made in areas such as services and investment. Besides relevant initiatives of China, mega FTAs including the TPP may have more impact in the future.