Xi Jinping Proposes Phase Two of China-South Korea FTA, Emphasizes Joint Effort Against Phishing

Chinese President Xi Jinping has proposed launching the second phase of negotiations for the China-South Korea Free Trade Agreement (FTA) and underscored the importance of bilateral cooperation in combating phishing crimes. The proposal signals a commitment to deepening economic ties and jointly tackling cybercrime.

China Proposes Second Phase of FTA Negotiations, Emphasizes Joint Action on Phishing

Xi Jinping Proposes FTA Phase Two to Lee Jae-myung: President Xi Jinping proposed the second phase of FTA negotiations with South Korea during a meeting with Lee Jae-myung. While specific areas and timelines for negotiation were not disclosed, discussions are expected to focus on non-goods sectors, such as services and investment. The two countries already implemented the initial China-South Korea FTA in 2015, which primarily focused on liberalizing trade in goods. Emphasis on Joint Response to Phishing Crimes: President Xi stressed the need for a joint response to the recent surge in phishing crimes. He stated, "Phishing crimes are causing serious damage to citizens of both countries," and emphasized the need to "work together to eradicate crime through information sharing and investigative cooperation." Lee Jae-myung reportedly agreed on the seriousness of phishing crimes and requested China's cooperation. The two countries plan to form a working-level consultation body to discuss specific cooperation measures.

Background to Discussions on Additional China-South Korea FTA Negotiations: Discussions on additional China-South Korea FTA negotiations appear to be an effort to overcome the limitations of the existing agreement and further expand economic cooperation between the two countries. In particular, liberalization in the service and investment sectors is expected to improve market access for companies in both countries and contribute to creating new growth engines. However, the possibility of disagreements over sensitive items such as agricultural products during the negotiation process has also been raised.

US Trade Pressure and Response of Domestic Companies

United States Raises Possibility of Imposing Tariffs on South Korean Products: Concerns are growing about the impact on the South Korean economy as the United States raises the possibility of imposing tariffs on South Korean products. Donald Trump recently stated that "the trade imbalance with South Korea is serious" and that he will "take necessary measures." While specific items subject to tariffs have not yet been announced, major export items such as steel and automobiles are likely to be included. Government Efforts to Block Tariffs Through Negotiations with the United States: The South Korean government is working to prevent tariffs from being imposed through negotiations with the United States. Lee Jae-myung stated, "We will do our best to resolve the issue in a way that does not harm economic cooperation with the United States." The government plans to explain the difficulties facing the South Korean economy to the United States and emphasize that tariffs could have a negative impact on both countries. Experts Warn of Possible Escalation of US-China Conflict: Experts warn that the negative impact on the South Korean economy could be even greater if the US-China conflict escalates. If the US-China conflict continues for a long time, the global supply chain could be reorganized and the export competitiveness of South Korean companies could be weakened, according to the analysis. Some experts advise that "South Korea should pursue economic interests while maintaining balanced diplomacy between the United States and China." Domestic Companies Seek to Diversify Exports and Strengthen Technological Competitiveness: As concerns about the deepening US-China conflict grow, domestic companies are focusing on diversifying exports and strengthening their technological competitiveness. It is pointed out that efforts are needed to reduce reliance on exports to specific countries and open up new markets. In addition, there is a growing voice that technological competitiveness should be strengthened by securing future growth engines such as artificial intelligence (AI) and eco-friendly energy.