S. Korea, EU spar over ’rules of origin’
Korea Times | 01-28-2008
S. Korea, EU Spar Over `Rules of Origin’
By Ryu Jin
Staff Reporter
South Korea and the European Union began a new round of talks for a free trade agreement (FTA) at the Shilla Hotel in Seoul Monday, this time focusing largely on the rules of origin,'' which has been one of the sticking points in the past negotiations.
Chief South Korean negotiator Kim Han-soo and his EU counterpart Ignacio Garcia Bercero resumed the talks with a handshake across the negotiating table with hopes to find a breakthrough in the month-long standstill.
Scheduled to run through Friday, the ongoing round is the sixth of its kind since the two sides launched the negotiations amid much fanfare in May 2007, right after the conclusion of the South Korea-U.S. FTA.
But the talks have been deadlocked by what the Europeans see as Seoul's protective stance toward some industries (such as automotive) and what the South Koreans described as the EU's high standards.
<doc1058|left>We are going to focus on the rules of origin in this round of talks,’’ a South Korean negotiator said on condition of anonymity. We hope that we can reach an agreement and meet halfway with the EU.''
Under EU-suggested rules, a product would be considered as coming from a trading partner only when at least 60 percent of the value of the finished item is added in that country.
South Korean negotiators want the ratio to be lowered to 40 percent, as a number of manufacturers in the country outsource many components from neighboring countries such as China to cut costs.
However, officials say a major breakthrough is unlikely for the free trade talks in this round since two of the hottest points in previous rounds ― tariff concessions on goods and auto standards for South Korean car imports ― have been taken off the table.
With regard to cars, for example, the EU has offered to eliminate its 10 percent tariff within seven years. In return, the EU wants South Korea to ease regulations on European cars by applying less restrictive international technical standards.
South Korea and the EU are major trading partners. In 2006, their bilateral trade topped $80 billion (roughly 75.9 trillion won). The EU is South Korea's second-biggest trading partner after China and is the biggest foreign investor in South Korea.
An FTA with the EU would be the biggest-ever for South Korea, surpassing the deal signed last June with the U.S., which now awaits ratification by legislatures in both countries.
Dozens of protesters ― mostly farmers ― braved the cold weather outside the hilltop hotel to blast the ongoing negotiations. A sign held by one farmer read,Stop South Korea-EU FTA that kills all Korean pig farmers.’’
