The South Korean government recently set up a new help center for local businesses, especially small and medium-sized companies, seeking to explore the Chinese market using the country’s bilateral free trade agreement with the neighborhood country.

A China desk has been set up at the Korea International Trade Association in Seoul, consisting of experts from five related agencies, including KITA (an association of Korean companies which helps Korean companies conduct international business), the Korea Trade-Investment Promotion Agency and the Korea Intellectual Property Protection Association, according to the Ministry of Trade, Industry and Energy.

Trade Minister Yoon Sang-jick believes the South Korea-China FTA will be a new steppingstone for growth of our companies, and the China Desk will be the irst to provide all necessary support to that end.

The FTA between the two, after negotiation almost two years ago, is settled. Lawyers say the English version has been signed, and the Chinese and Korean versions are being prepared.

Hoil Yoon, a founder of Yoon & Yang in Seoul, says the China desk was established to assist South Korean exporters and importers in their utilization of the Korea-China FTA, which is scheduled to come into effect soon. “My understanding is that the information to be provided by the China desk is not limited to the information relating to the market, but is to include all necessary information that any company would need in order to make the best out of the Korea-China FTA. However, issues that are not related to the implementation or facilitation of Korea-China FTA will not be taken care by the China desk.”

The FTA is expected to help greatly boost South Korea’s exports to China.

The most outstanding provision found in the FTA text is that China has agreed to include the process that has been conducted in the industrial complexes in North Korea when determining the origin criteria, says Yoon. “Korean companies may utilize the low-cost labour in the Kaesong Industrial Region in North Korea in manufacturing goods that are for exportation to China. This sort of an advantage was not provided in FTAs that Korea has concluded with the US or EU.”

Although the tariff reduction or exemption period under the Korea- China FTA is longer than expected, it is also true that Korea has occupied an more advantageous position than other countries in making exports to the Chinese market. “We need to consider not only the tariff schedule but also the non-tariff agreements between Korea and China in evaluating the effect that Korea-China FTA can bring, and our opinion is that cosmetics, healthcare device, and auto parts industries are satisied with the result of the Korea-China FTA compared to other industries in Korea,” Yoon says.

Chen Hao, a partner at Beijing DHH Law Firm says numbers of exported electronic products, cosmetic products and drama series to China may be increased under the impact of FTA.

Although details of the IP scheme are still conidential, previous FTAs between China and other regions/countries may shed some light on the IP scheme, for the IP schemes covered in previous FTAs have followed an observable, evolving path: irst starting from scratch, then evolving into a separate chapter, with the content being broadened and deepened. An striking characteristic of the IP scheme in the FTAs between China and other regions/countries is that the standardized protection level of IP provided by TRIPs has been strictly followed, which means few, if any, TRIP-plus (protections above the level required by the TRIPs) protections are created through the mechanism of FTAs.

The FTA between China and Switzerland is a good starting point to hammer out the details of the proposed FTA between China and Korea, Hao says. Among the provisions on IP, the information provision duty and the enforcement scheme may be actively utilized by Korean enterprises. “On one hand, the information provision duty requires that each party shall, on the request of the other party, actively provide information on IP policies and IP enforcement to the other party. On the other hand, the enforcement scheme sets forth such aspects as border measures, civil protections (including but not limited to calculation of damages, grant of preliminary/ permanent injunctions, etc.) and criminal protections (in re passing-off and piracy). Korean enterprises active in the exporting sector, especially those exporting electric products, cosmetic products and drama series to China, should become familiar with these protection measures and, wherever possible, utilize the same to optimize their business strategies. In this regard, assistance from local IP attorneys will prove to be essential.”

Last but not least, Hao says, it should be noted that no matter how detailed the would-be IP scheme may be, it may still leave some issues untouched, on purpose or otherwise. What makes the IP scheme in the FTA so important is that, under mutuallyagreed guiding principles, it provides a platform for both parties to hammer out, with goodwill, the details of the IP issues which the enterprises from both countries may encounter in real world, so as to incentivize innovation, promote competition, and facilitate trades, investments and technology transfer between the two countries.

Zhang Zhenbao, a lawyer at Wincon in Seoul, describes the FTA trade as two families doing businesses: Both need to balance their own proits and losses as well as consider the cooperation results, politically and economically.

“Generally, China wants to build ties with South Korea economically and diplomatically, and South Korea needs inancial support from China,” Zhang says.