The free trade agreement (FTA) between China and South Korea will officially come into force from Sunday, providing an opportunity for the two countries to push forward their already-close cooperation partnership further.
Seoul's trade ministry said Saturday that the free trade accord will take effect from Dec. 20. It is widely anticipated in South Korea to expand presence of South Korean companies in the world's largest consumer market and boost bilateral relations in trade and economy.
China is South Korea's largest trading partner, with Chinese exports accounting for over a quarter of the total during the January-November period of this year alone.
South Korea stands as China's third-biggest single-country partner of trade.
Under the deal, both countries will eliminate tariff on more than 90 percent of traded goods within 20 years after the implementation. As the FTA gets effective before the end of this year, the tariff cut will enter the second year in less than two weeks after the implementation.
According to Seoul's estimates, South Korean manufacturers are forecast to see exports to China grow 1.35 billion U.S. dollars thanks to the implemented FTA within a year.
If the liberalized trade reaches its goal 20 years later, South Korean companies are expected to reduce tariff costs by up to 5.44 billion dollars annually, much higher than tariff savings of 930 million dollars from the South Korea-U.S. FTA and 1.38 billion dollars from the South Korea-EU FTA.
South Korea expected the FTA with China to help raise its real GDP by 0.96 percentage points, create 53,800 jobs and enhance consumer benefits by 14.6 billion dollars.
Negotiations on the China-South Korea FTA were first brought up in September 2004 when trade ministers of the two countries met on the sidelines of the ASEAN-plus-three meeting of economic ministers.
The joint private-sector research on the bilateral FTA had run from 2005 to November 2006, followed by the joint public-private sector research until May 2010.
The preliminary inter-governmental dialogue and trade ministers' talks were held before launching the first round of negotiations on the bilateral free trade pact in Beijing in May 2012.
The negotiations began picking up pace after Chinese President Xi Jinping and his South Korean counterpart Park Geun-hye agreed in July 2014 to step up efforts to finalize the talks within the year during their summit meeting.
About four months later, Xi and Park declared a substantive agreement on the FTA in Beijing, followed by the initialing in February this year and the signing in June of the deal each.
The two sides had held negotiations a total of 14 times before reaching an agreement.
The South Korean parliament ratified the free trade pact on Nov. 30, and the two sides reached a final agreement to implement the deal from Dec. 20.
South Korean experts saw the FTA between Seoul and Beijing serve as an important milestone to boost economic integration in the region as well as boost cooperation partnership in trade and economy of the two countries.
The bilateral FTA will play a role as a good starting point that will speed up negotiations on the trilateral FTA, also including Japan, and boost negotiations on the Regional Comprehensive Economic Partnership, according to Kim Young-Gui, research fellow at the Korea Institute for International Economic Policy.
Hyundai Research Institute's researcher Han Jae-Jin said that the bilateral FTA will affect the region and even the whole world as it can be connected to other regional trade pacts like the trilateral FTA involving Japan.
China, South Korea and Japan, whose combined GDP makes up 20 percent of the world total, constitutes one of the three largest economic blocks worldwide, along with the European Union and North America.
The China-South Korea trade deal will, of course, serve as growth engines for the two sides, deepening economic and trade cooperation further.
Economic cooperation between Seoul and Beijing has expanded persistently since the two sides set up diplomatic relations in 1992.
After the 2008 global financial crisis, the two countries strengthened cooperation further via the won-yuan currency swap deal to stabilize the foreign exchange market.
A year earlier, South Korea opened the direct transaction market between its currency and the Chinese yuan, and the two sides agreed to open such trading market in China next year.
With the FTA implementation with China, South Korean companies predicted an expanded presence in the world's second largest economy compared with U.S., Japanese and European rivals as China has yet to sign FTAs with the three partners.
South Korean experts expected China's consumer market to grow to 10 trillion U.S. dollars by 2020.