SEOUL: South Korea on Monday ratified a free trade agreement (FTA) with China that would remove most tariffs between Asia’s largest and fourth-largest economies.
The pact, signed in June, was passed by parliament with a 196-33 majority —although it still needs China’s ratification in order to take effect.
The green light came after the Seoul government promised to provide about one trillion won ($865 million) in direct financial support for farmers and fishermen who argue that their livelihoods will be severely affected by the deal.
Negotiations for the agreement, which began in 2012, had often been marred by angry protests from South Korean farmers who fear an influx of cheap Chinese imports.
In an effort to assuage opponents, the final pact excluded many of South Korea’s major farming and fisheries goods like rice, beef, pork, pepper and squid.
China, meanwhile, excluded or delayed the opening of its relatively less-developed manufacturing segments, such as the auto sector and display panel production.
The two countries will gradually remove tariffs on more than 90 percent of traded goods within 20 years.
China is the South’s top trading partner as well as its biggest export market, and two-way trade between South Korea and China stood at US$290.5 billion in 2014.
South Korea is also one of the biggest foreign investors in China.
Parliament also ratified two other FTAs on Monday, with New Zealand and Vietnam.