Free Trade Agreement

PUdaily, Shanghai-China and South Korea are going to eliminate tax of polyether polyols to zero in 15 years following the Free Trade Agreement (FTA) signed between Beijing and Seoul on Monday which is expected to come into effect by end 2015. Import tax rate of China and South Korea both stays at 6.5%, according to China Daily and polyols companies in South Korea.

Besides, tax of 5.5% of propylene oxide imported to China will be decreasing as the same to polyols, however, that of imports to South Korea will retain.

More details of TDI, polymeric MDI and pure MDI please refer to below table.

In 2014, China imported 240 tons of propylene oxide from South Korea whilst South Korea imported zero propylene oxide from China. Likewise, polyols imports to South Korea were 22,799 tons and imports to China were 56,134 tons (both origin data from custom data and not revised).

In addition, PUdaily detailed analysis of the tax cut impact on bilateral markets are on the way

Table: Tax cut of Some PU Raw Materials under China & South Korea FTA

China and South Korea signed a bilateral free trade agreement on June 1, the largest bilateral FTA deal for China in terms of volume.

Under the agreement, China will abolish tariffs on 91 percent of all South Korean products within 20 years, while South Korea will eliminate tariffs on 92 percent of all goods from China.

The countries began talks in May 2012 covering 17 areas, including trade in goods and services, health care, entertainment, investment and trade rules, as well as e-commerce and government.

After Chinese President Xi Jinping's visit to Seoul in July 2014, negotiations on the pact made rapid progress. President Xi and his South Korean counterpart Park Geun-hye announced a conclusion of substantive negotiations on the deal in Beijing in November 2014.

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