China-Korean Free Trade Agreement Expected to Be Signed This May

After lengthy negotiations China and Korean are expected to sign Free Trade Agreement (FTA) this May. Hopefully, the FTA will be implemented before the end of this year. Within 20 years of its implementation, China will eliminate 91% import tariffs levied on Korean products while Korea will eliminate 92% of import tariffs on Chinese products.

The draft FTA stipulates that 14 forms of cosmetic taxes will no longer be levied on Korean cosmetics. As a result, the overall price of Korean cosmetics in China will decrease with most forecasters predicting a 20% price decrease.

Korean research institutions also predict that the Korean cosmetic industry will benefit the most from the FTA. E-commerce has been listed as an important cooperative area between China and Korea, which will facilitate Korean cosmetic companies shifting their heavy reliance on traditional business channels such as franchised stores, department stores, etc. Furthermore, the promotion of bilateral investment specified in the FTA will also contribute to improve the competitiveness of Korean cosmetics in Chinese markets.