China, South Korea renew service sector talks, opening up a ‘win-win for both economies’

China and South Korea signed a free-trade agreement that went into effect in December 2015

Delayed discussions over the second phase began in 2018, although progress stalled, prompting a meeting between chief negotiators earlier this month

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Uncertainty looms over the negotiations as South Korea’s new administration under President Yoon Suk-yeol seeks to cut dependency on China for trade. Photo: YNA/dpa

Published: 5:00am, 28 Jul 2022Updated: 9:15am, 28 Jul 2022

Renewed talks between China and South Korea to further open their service sectors could represent a “win-win situation for both economies”, analysts said.

The discussions over the second phase of a free-trade agreement that went into effect in December 2015 began in 2018, with nine working-level discussions taking place, although progress stalled, prompting a meeting between chief negotiators on July 13.

China’s commerce ministry said that the two sides had “in-depth consultations on cross-border trade in services, investment and financial services and other issues on rules, as well as market access, with positive progress”.

South Korea’s trade ministry said negotiations had been delayed due to the coronavirus, and also prioritisation of preparations for the Regional Comprehensive Economic Partnership (RCEP) that went into effect earlier this year. RCEP is a free-trade agreement among 15 Association of Southeast Asian Nations (Asean) and non-Asean economies in the Asia-Pacific, including China and South Korea.

But despite having resumed, the talks are still far from developing into the stage where sectors are narrowed down and details are discussed.

Uncertainty also looms over the negotiations as South Korea’s new administration under President Yoon Suk-yeol is seeking to cut dependency on China for trade, by boosting cooperation with Europe and Australia, as the government strengthens its alliance with the US-led West.

“Regardless of the developments, we are aiming to expand the opening of markets,” said an unnamed official at South Korea’s trade ministry, who did not want to be named due to the sensitivity of the issue.