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S Korea, EU to hold minister-level talks on FTA

Xinhua 2008-06-29

S Korea, EU to hold minister-level talks on FTA

SEOUL, June 29 (Xinhua) — Trade ministers from South Korea and the European Union (EU) will meet next week to resolve contentious issues such as auto trade and rules of origin in their free trade negotiations, according to officials here on Sunday.

During a two-day inter-session meeting with EU trade commissioner Peter Mandelson in Paris from Tuesday, South Korea’s trade minister Kim Jong-hoon will discuss how the two sides to reach a deal at an earlier date, the officials said.

Since concluding a free trade agreement (FTA) with the United States last year, South Korea has held seven rounds of negotiations with the EU in a bid to gain greater footing in the 27-nation economic bloc, South Korea’s second-largest trading partner after China.

During their seventh round of negotiations in May, the two sides reported "significant" progress in their free trade negotiations, saying they had agreed to reach a deal within this year.

"A date for the eighth round of talks has not yet been set, but will be held depending on the results of inter-session meetings and minister-level talks," Yonhap News Agency quoted the officials as saying.

The negotiations have made little headway as both sides have been reluctant to accept each other’s demands on tariff reduction, rules of origin, and auto trade and auto-related technical standards, one of the most divisive issues between the two sides.

Seoul said it would remove all tariffs on industrial goods within three years with some exceptions, and eliminate tariffs on roughly 72 percent of EU goods as measured by value in three years, compared with 68 percent in a previous offer. But the EU expressed disappointment with South Korea’s offer, saying it falls short of the accord Seoul signed with Washington in June 2007.

The EU is demanding that South Korea cut tariffs on cars and other products to the same extent that it did in the trade deal with the U.S.

Bilateral trade came to 89.8 billion U.S. dollars in 2007, with some unofficial studies suggesting an FTA would boost that figure by as much as 40 percent in the long run. The EU is also the largest foreign investor in South Korea, with outstanding investment reaching 44.8 billion U.S. dollars at the end of 2007.

Currently, South Korea has FTAs with Chile, Singapore and the European Free Trade Association, as well as a partial pact with the Association of Southeast Asian Nations. Seoul is also seeking similar trade deals with Canada, India and Mexico.

 source: Xinhua