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EU-Korea FTA hits final delay

JoongAng Daily. Korea

EU-Korea FTA hits final delay

Expected approval is delayed until Monday because of Italian complaints

11 September 2010

(Yonhap) BRUSSELS-The European Union’s Foreign Affairs Council yesterday decided to rediscuss the approval of a free trade pact with Korea on Monday, and the 27-member bloc hopes to sign the pact in early October, the minister presiding over the council meeting said.

Italy has reiterated that it will veto the free trade pact, saying the treaty would harm its automakers, including Fiat. The council was due to approve the deal on yesterday.

“We have come very close to finalizing the procedure to adopt the decision to sign the free trade agreement with South Korea ... Hopefully we will be able to finalize it on Monday,” Belgian Foreign Minister Steven Vanackere told reporters. The two sides initialed the free trade deal in October last year, three months after concluding negotiations.

Earlier last month, Korea’s cabinet approved the deal. The pact must be ratified by Korea’s parliament, EU member states and the European Parliament.

Vanackere said he hoped ministers will be able to approve the trade pact during the Monday meeting, so that leaders from the EU and Korea could sign the deal before or during a summit in Brussels in early October. The Asia-Europe Meeting (ASEM) summit is set to be held in Brussels from Oct. 4-5.

Under the accord, Seoul and Brussels will eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of Korean goods within three years after the accord is put into effect. They have also agreed to abolish tariffs on most industrial goods within five years after the deal goes into effect.

The two sides agreed to eliminate tariffs on cars with an engine displacement of over 1.5 liters within three years. Tariffs for smaller cars with an engine displacement of less than 1.5 liters would be lifted after five years.

Korea currently imposes an 8 percent import duty on European cars, while the EU imposes a 10 percent duty on autos from Korea. The pact permits duty drawbacks for refunds for tariffs levied on parts.