Reuters | Oct 07 2010

EU signs free-trade deal with South Korea, its first with an Asian nation

The European Union and South Korea signed a free-trade deal yesterday that could double trade between them and trigger a rush among Asian states to enter into trade pacts with the EU.

The accord, Europe’s first with an Asian nation, is set to take effect on July 1 next year if ratified by the European Parliament.

The deal will eliminate €1.6 billion ($2.9 billion) of duties a year for EU exporters to South Korea and tackle non-tariff barriers, including regulations in industries such as electronics.

Europe’s spirits industry welcomed the deal for its potential in boosting sales of EU-produced drinks.

However, the United States and Japan are concerned that it may hurt sales of their products in Europe and Asia.