Korea - China Free Trade Agreement

The Korea - China Free Trade Agreement provides for the elimination of tariffs for the following goods:

• Electric generation equipment 
• Mechanical equipment including pumps, appliances, and other advanced machinery
• Electric motors, transformers, batteries, and capacitors
• Mineral ore and processed products including graphite, manganese, copper, aluminum, and nickel
• Various products manufactured using above minerals and metals such as sheets, powders, bars, and plates
• Photovoltaic cells

Tariffs for motor vehicles (including passenger vehicles and electric vehicles) are not eliminated ; while tariffs for key components (including vehicle frames, shafts, transmission, and lithium ion batteries) are. 

The Agreement also includes rules of origin. Goods can benefit from preferential tariff treatment if:

• wholly produced or obtained in the country (applicable to minerals, raw materials, and waste and scrap materials)
• meeting requirements included as provisions to the agreement, mainly through having undergone manufacturing processes that warrant a change in the HS code or meet regional value content requirements (applicable to manufactured goods)

The Investment provisions of the Agreement carries national treatment and most-favoured nation treatment provisions that require investors from a foreign party to be treated equally with both domestic investors or those from any other nations.  It, however, does not prevent a party from taking temporary safeguard measures in the event of serious financial difficulties, threats, or other exceptional circumstances.

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