EU sets ambitious goals for South Korean free trade deal
Deutsche Presse-Agentur
Jul 16, 2007
EU sets ambitious goals for South Korean free trade deal
Brussels — The European Union on Monday said it was setting very ambitious goals for a free trade agreement with South Korea, the first such deal between the 27-nation bloc and one of Asia’s leading economic power houses.
’We are setting the bar very high with a 100-per-cent trade liberalization offer,’ an EU trade official told Deutsche Presse- Agentur dpa as European and South Korean officials opened a second round of negotiations in Brussels.
The talks are expected to last until Friday, with a third round of negotiations scheduled to open in September.
EU Trade Commissioner Peter Mandelson launched the negotiations with South Korean Trade Minister Kim Hyun-chong in May. EU officials say discussions so far have been ’very constructive’ and that a deal could be finalized by the end of the year.
This is the first time that the EU has offered 100-per-cent tariff-free access to its market to any foreign trade partner.
’If the South Koreans come close to the same figure or can match it, we will get a very ambitious deal,’ an EU official said.
In return the EU is looking for substantial new access to the growing South Korean market in key areas like automobiles, manufactured goods and business services.
Brussels is also seeking the removal of restrictions on EU investments in South Korea. The bloc is currently the biggest investor in the country, with European direct investment accounting for 45 per cent of all foreign investments worth 5 billion dollars last year.
The EU wants to put a new focus on South Korean non-tariff barriers and so-called ’behind-the-border’ issues or complicated and burdensome regulations which in some cases present greater obstacles than tariffs.
The talks with South Korea are part of a new EU strategy to clinch bilateral trade agreements with emerging economies, including India and members of the Association of Southeast Asian Nations (ASEAN).
Officials say these deals will complement the Doha multilateral World Trade Organization talks, but many see the EU move as more proof that the WTO round is in deep trouble.
EU studies suggest that an ambitious free-trade deal with Seoul could increase EU exports to Korea and Korean exports to the EU by between 30 and 40 per cent respectively.
For Europe, the agreement will mean wider access to the prosperous South Korean market with its huge appetite for quality European goods.
Korea, in turn, is likely to see big gains in areas like manufacturing and access to competitive EU business services.
EU-Korea trade reached 60 billion euros in 2006. The EU is Korea’s second largest export destination after China.
The US and South Korea signed a free-trade agreement in June, which is awaiting legislative approval in both countries.
