Korea, EFTA ink free trade deal
JoongAng Ilbo, Korea
Korea, EFTA ink free trade deal
16 December 2005
South Korea’s trade minister and his counterparts from the European Free Trade Association, or EFTA, signed a free trade agreement yesterday at the World Trade Organization ministerial conference in Hong Kong.
The Ministry of Foreign Affairs and Trade said yesterday that Trade Minister Kim Hyun-jong and the four trade ministers from the EFTA member nations signed the free trade agreement yesterday morning. EFTA comprises four European nations ― Iceland, Norway, Switzerland and Liechtenstein ― that are not members of the European Union.
After completing some administrative formalities, the agreement is expected to take effect in July next year. Under the deal, EFTA member nations will immediately scrap tariffs on all imports from Korea, which is expected to provide a major boon to Korean exporters of cars, electronics, textiles and white goods.
In return, South Korea is to scrap its tariffs on 99.1 percent of imports from EFTA countries over the next 10 years.
A notable feature of the agreement is that it recognizes products made at the Kaesong Industrial Complex, a special industrial zone in North Korea housing South Korean companies’ factories, as South Korean, thereby granting them the same economic benefits as other products from the South.
EFTA will become Korea’s second trade partner to grant tariff reductions to products made in Kaesong after Singapore agreed to do so when signing a free trade agreement with Asia’s fourth-largest economy in August.
According to a study by the Korea Institute of Economic Policy, the new trade agreement with EFTA will help Korea’s gross domestic product to expand by 0.02 to 0.05 percent.
