"The Korea-China free trade agreement is now about a bilateral trade but is anticipated to play a pivotal role that will affect Asia and the whole world," Han Jae-Jin, a senior research fellow at Hyundai Research Institute (HRI), said in an interview.
Seoul and Beijing signed their bilateral FTA in June after three years of negotiations. The two countries agreed to eliminate tariffs on more than 90 percent of traded goods each other within 20 years after implementing the deal.
In her recent parliamentary address for next year's budget plan, South Korean President Park Geun-hye prompted lawmakers to ratify the trade pact with China rapidly, saying that the delayed ratification will make local exporters lose an export opportunity worth 4 billion won (3.5 million U.S. dollars) on a daily basis.
"The Korea-China FTA has a significant meaning in the region as it will not be confined to South Korea and China and can be connected to other Asian nations," said Han.
Both Seoul and Beijing have already signed FTAs with ASEAN member states, raising chances for the Asia's No.1 and No.4 economies to expand economic cooperation with Southeast Asian countries through their bilateral FTA. If the trilateral free trade accord, including Japan as well as South Korea and China, is inked, it would help further strengthen economic cooperation in Northeast Asia.
China's "One Belt One Road" initiative has many in common with Eurasia initiative, advocated by President Park, in terms of aim, strategy and target areas. It raises possibility for an expanded cooperation in trade and investment between the two countries.
"China's 'One Belt One Road' initiative provides a good opportunity for Asian countries as well as China," Han said, noting that the initiative would offer many opportunities for South Korean companies as Seoul entered the Asian Infrastructure Investment Bank (AIIB) as one of founding members.
South Korea expected the free trade accord with China to raise its real GDP by 0.95 percentage points and create 53,800 new jobs in the next 10 years. Economic cooperation between South Korea and China has persistently expanded in the past 23 years since the two nations set up diplomatic ties in 1992. After the 2008 global financial crisis, Seoul and Beijing have strengthened cooperation further via the won-yuan currency swap deal to stabilize foreign exchange market and the signing of the bilateral FTA. Now, China becomes South Korea's largest trading partner while Seoul is Beijing's third-biggest trading partner as a single country. Trade volume between the two countries increased to 235.4 billion U.S. dollars in 2014.
"I think it is important to remove regulations like tariff barrier and trade quota on goods, mainly traded between the two countries, in order to expand bilateral trade persistently. In that sense, the Korea-China FTA will affect the bilateral trade positively and result in a trade volume expansion," said Han.
Han said that if the FTA takes effect, it will upgrade high value-added industries via increased exchanges between industries of the two countries, forecasting that trade items between the two countries would rapidly change from low value-added to high value-added ones.