South Korea and China recently announced that their forthcoming free-trade pact will take 15 years to eliminate Chinese tariffs on South Korean base oils and lubricants.
Under the trade pact, China will eliminate the existing 6 percent customs duty imposed on base oils, lubricating oils and lubricating greases imported from South Korea. The plan will reduce duties in 15 equal annual stages beginning on its implementation date, which has not yet been set. The products will be free of customs duty on Jan. 1 of the 15th year.
The countries announced the details affecting base oils and lubes on Feb 25. The final plan for the pact is scheduled to be formally signed by the first half of this year and then will need to beratified bytheNationalAssembly before taking effect.
According to the website for Chinas Ministry of Commerce, negotiations on the plan began May 2012. The countries leaders reached a conceptual agreement at the Asia Pacific Economic Cooperation summit in Beijing last November.
China is one of the two largest lubricant markets along with the United States, and it relies on South Korea as one of its largest sources of base oil imports. With trade duties eased, experts predict that South Korea could overpass Singapore as Chinas top supplier.