S. Korea, EU to announce conclusion of FTA later Monday: official
Yonhap | 13 July 2009
S. Korea, EU to announce conclusion of FTA later Monday: official
By Byun Duk-kun
STOCKHOLM, July 13 (Yonhap) — South Korea and the European Union (EU) have reached agreement on a proposed free trade deal, leaving only initialing and signing of the agreement before it can be submitted to their respective legislatures for ratification, a South Korean official said Monday.
South Korea and the EU began negotiations on an free trade deal two years ago. In March this year, they reached a tentative agreement on the deal with two stickiest issues — duty drawback and rules of origin — remaining unsettled.
The official said what he called a "virtual" conclusion of the free trade agreement (FTA) will be declared later Monday by South Korean President Lee Myung-bak and Swedish Prime Minister Fredrik Reinfeldt, who are set to hold a bilateral summit here.
Sweden assumed the six-month presidency of the EU at the beginning of the month.
"The leaders will announce that a mutual agreement on all remaining points of contention has been reached and will call for an early initialing of the deal following swift legal reviews," the official, well versed in the Korea-EU FTA negotiations, told reporters here.
"This means all negotiations have been concluded and that a Korea-EU FTA has been reached," the official added.
Lee and Reinfeldt, in their announcement, are expected to say only that the negotiations have culminated rather than declare an official accord. The declaration, technically, needs to be made by the European Commission, the executive committee of the EU that has led the FTA negotiations with Seoul.
At least three EU member states were earlier said to have opposed the EU’s trade deal with South Korea, but the South Korean official, currently accompanying the president, said all the countries have withdrawn their reservations, with only one country saying it needs a little more time to deal with any domestic opposition.
"The sides should be able to conclude their legal reviews after a couple of meetings by the end of August and then hold an initialing ceremony sometime in September," the official told reporters.
Brussels had claimed that the so-called duty drawback, which allows Seoul to return import tariffs to South Korean companies that use imported materials to make products for exports, would favor South Korean exporters.
The EU does not allow duty drawbacks under its existing free trade accords with Mexico and Chile.
Also, South Korea wants items made at a joint industrial complex in North Korea to be treated as South Korean goods.
The EU was South Korea’s second-largest trading partner after China last year, with two-way trade reaching more than US$98 billion.
If the pact is finalized, it will boost South Korea’s exports by $11 billion and gross domestic product by 3.08 percent, according to a forecast by the Korea Institute for International Economic Policy.
South Korea, Asia’s fourth-largest economy, reached a free trade deal with the United States in March 2007, shortly before it launched talks with the EU, but the deal has remained stalled in both legislatures.
