S. Korea, EFTA seal free trade accord
Tuesday July 12, 2005
S.Korea, EFTA Seal Free Trade Accord
SEOUL, July 12 Asia Pulse - South Korea and the European Free Trade Association (EFTA) signed a bilateral free trade agreement (FTA) on Tuesday, a deal that could give domestic companies a beachhead in the European market, the Foreign Affairs and Trade Ministry said.
The agreement was made between South Korea’s Trade Minister Kim Hyun-chong and Swiss Minister of Finance Deiss, who met on the margins of a trade ministerial meeting of the World Trade Organization in Dalian, China, the ministry said.
The accord is South Korea’s third free trade pact following deals with Chile and Singapore last year. But it is Seoul’s first free trade deal signed with a regional economic bloc.
The EFTA, a four-nation free trade bloc comprising Switzerland, Norway, Iceland and Liechtenstein, was established in 1960. None of them are members of the European Union.
Under the deal, the EFTA will lift all tariffs on imports from South Korea as soon as it goes into effect, while South Korea will remove import duties on 99.1 per cent of the products made in the economic bloc over the next seven years.
However, import tariffs on some agricultural and fisheries products will be eliminated over the next 10 years or be retained.
Products made in North Korea’s Kaesong industrial complex will benefit from the tariff exemption, laying the ground work for exports.
The industrial park, close to the inter-Korean border, resulted from the June 15, 2000 summit between the leaders of the two Koreas. More than a dozen South Korean companies currently have plants there, taking advantage of the North’s cheap but skilled labor.
The free trade pact also calls for mutual cooperation in production of TV programs, which the ministry said will expand cultural exchanges and help South Korean TV stations advance into the European market.
The ministry said the free trade deal could go into effect around the middle of 2006 after winning approval from the president and the National Assembly.
"The agreement is likely to take effect around July next year," a ministry official said. "It will help pave the way for South Korean companies to tap the European market."
The agreement is expected to help boost South Korean exports of manufactured goods like apparel, cars, and leather products, the ministry said.
Such products as apples, pears, kimchi and instant noodles will likely be shipped newly to the region, it added. Kimchi is South Korea’s spicy fermented cabbage side dish.
The economic bloc is South Korea’s 20th-largest trading partner. South Korean exports to the EFTA stood at US$863 million last year, with imports from the region reaching $1.79 billion.
(Yonhap)
